Preamble

The House met at half-past

Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — WALES

Plan for Wales

Mr. Anderson: asked the Secretary of State for Wales what is his latest estimate of the date of publication of the Plan for Wales, the formulation and implementation of which was assigned to his Department in the original allocation of responsibilities in November, 1964.

The Minister of State, Welsh Office (Mr. George Thomas): My right hon. Friend has extended the field to be covered by this Plan and does not now expect to have it ready for publication before the end of the year.

Mr. Anderson: Does the Minister not recognise that there must be many business decisions and local authority decisions awaiting the forecasts and recommendations to be contained in this Plan, and that there is an overwhelming case for speeding up the publication of the Plan under the present uncertainties?

Mr. Thomas: It is essential that every care should be taken in drawing up this Plan. At least 15 Government Departments have to be consulted, as well as the Welsh Economic Council, the University of Wales, both sides of industry, the Welsh Tourist Board, and others.

Mr. Gibson-Watt: The right hon. Gentleman will be aware that, in the National Plan last year, the Government said that 140,000 agricultural workers should come from the country as a whole, of which, I understand, 5,000 are to come from Wales. In view of the necessity for maintaining confidence in the farming industry, will the right hon. Gentleman see

that a realistic figure is put in any Plan for Wales?

Mr. Thomas: Just on a point of information, Mr. Speaker, I am not yet a Privy Councillor, but I am quite willing!
As regards the figures for which the hon. Gentleman asked, we will, of course, bear in mind the need for confidence in the industry.

Mr. Hooson: Is the Plan to be revised in the light of the Prime Minister's announcement yesterday and in the light of the current economic situation? If so, what changes does the Minister of State expect?

Mr. Thomas: The hon. and learned Gentleman must not be too pessimistic. This will be a realistic Plan holding out good opportunities for the Principality.

Cwmbran Development Corporation (Houses)

Mr. Abse: asked the Secretary of State for Wales how many houses were completed by the Cwmbran Development Corporation for private sale during the last 12 months; how many of those completed now stand vacant; what are the price range and ground rents of the vacant houses; and what research into potential consumers' needs and financial means took place before these houses were built.

The Under-Secretary of State for Wales (Mr. Ifor Davies): In the last twelve months 60 houses have been completed for sale of which 37 are vacant. Prices range from £3,800 to £4,450 and ground rents from £20 to £27 per year. The Corporation's decision to build was based on inquiries received by it.

Mr. Abse: Is it not somewhat disappointing that so many houses should be vacant, in view of the fact that private builders in the area have no difficulty in disposing of their houses? Is it not necessary that a warning should be given to the Corporation to make certain that it is investigating in depth the nature and type of house which should be put up in the area?

Mr. Davies: My hon. Friend will appreciate that there is always an element of risk in building houses for sale. The Corporation made the best assessment


that it could, according to the demand. If houses cannot be sold, they will be available for letting.

Mr. Abse: asked the Secretary of State for Wales what is the present programme of the Cwmbran Development Corporation for future building of houses for sale; at what maximum price and maximum ground rent it is intended to offer houses for sale; and whether the programme is being reviewed, in view of the tardy sales of Cwmbran Development Corporation houses so far.

Mr. Ifor Davies: To provide a balanced community and to meet demand in the area, the Corporation has plans for building 118 higher-income group houses for sale. As a first stage it has proposed building 29 houses at prices of about £8,500 and ground rents of £52 per year and my right hon. Friend is considering this.

Mr. Abse: Would the Minister consider that, in Monmouthshire, we are in an ocean of obsolescent housing and that to cater for income groups of this kind is having an odd sense of priorities, particularly when he has already indicated that there are houses of very much less value unable to be sold in the area?

Mr. Davies: The Corporation is confident—and I share its confidence, following a recent visit—that industrial development in South Monmouthshire will give rise to a demand for houses for business executives, and it would be in the interests of the new town to meet some of the demand. Having regard to the reference to tardy sales, it is only fair to recognise that the total number of houses built for sale by the Corporation since its inception is 276. Of that total, 239 have been sold.

National Assistance Recipients (Rates Rebates)

Mr. Gower: asked the Secretary of State for Wales if he is aware that persons in Wales who are in receipt of National Assistance are thereby disqualified from any rates rebates; why this is; and what steps he will take to improve the scheme.

Mr. George Thomas: My right hon. Friend has nothing to add to the reply which the hon. Member received from

my right hon. Friend the Minister of Housing and Local Government last Tuesday.

Mr. Gower: Is the hon. Gentleman aware that there seems to be a good deal of misunderstanding about this on the part of the recipients of National Assistance who have heavily rated houses? They seem to think it strange that persons of such small resources should derive no benefit from a scheme of this kind.

Mr. Thomas: Whoever has the misunderstanding, the hon. Gentleman ought to understand that when full provision for the rates is made in the assessment of the Board's weekly allowances it would be wrong to make further provision again.

Road Schemes

Mr. Gower: asked the Secretary of State for Wales if he will list the local authorities whose urban road schemes on which forward planning and preparation could start in the near future which have a total value of approximately £81.5 million, together with the approximate value for each authority.

Mr. George Thomas: No, Sir. My right hon. Friend has written to the hon. Member.

Mr. Gower: While appreciating some of the difficulties of the Minister's Department, may I ask whether he can give some assurance that every attempt will be made to expedite the provision of the details?

Mr. Thomas: We will move with our customary speed.

Forms and Documents (Welsh Language)

Mr. Elystan Morgan: asked the Secretary of State for Wales whether he will arrange for a survey of public forms and documents in current use in Wales to be made with a view to their translation into the Welsh language as soon as possible.

The Secretary of State for Wales (Mr. Cledwyn Hughes): I would refer my hon. Friend to the answer which I gave him on 1st July, 1966. I hope to have the result of this investigation some time next month.

Mr. Morgan: Can the right hon. Gentleman give some indication of the nature of the documents and forms to be translated and of the numbers involved?

Mr. Hughes: It is not possible to give this information until the results of the survey are available. I will have discussions with my colleagues who are responsible and, following this, it will be possible to determine what forms can be translated in advance of legislation and to assess which of them are in fair demand.

Mr. Emrys Hughes: Is the right hon. Gentleman contemplating a Welsh edition of Erskine May?

Mr. Hughes: No, Sir, but if such an edition were to be published, my hon. Friend would not be able to read it.

Mr. Forrest: Is it not possible that in less than an hour from now this issue will be tied up?

Mr. J. Idwal Jones: asked the Secretary of State for Wales whether, in circumstances where it is necessary to await legislation to validate the use of certain forms and public documents in the Welsh language in Wales, he will authorise the preparation of adequate and suitable translations of such forms and documents in anticipation of such legislation.

Mr. Cledwyn Hughes: I will certainly bear my hon. Friend's suggestion in mind, but I cannot at this stage anticipate the extent to which the many Ministers who issue forms in Wales will find it practicable to do so in Welsh.

Mr. Jones: I appreciate the complexity of this matter, involving as it does the mass of legislation passed since the Act of Union of 1542, but can my right hon. Friend give us any information about when this legislation is likely to be introduced?

Mr. Hughes: As my hon. Friend said, this is a complex issue, but good progress is being made, and I hope that it will be possible to introduce the Bill during the next Session, and before then to make some of the administrative changes recommended by the Committee.

Mr. Hooson: May I take it from that that the Government intend to bring in a permissive all-embracing Bill to give effect

to the Hughes Parry Report, which is supported by all parties in this House?

Mr. Hughes: Our purpose is to introduce a Bill in due course, and work on the Bill is now proceeding. I cannot give details at this stage, but it will be on the basis of the statement made by my right hon. Friend the Member for Llanelly (Mr. James Griffiths) in the Welsh Grand Committee on 14th December last.

Mr. Gibson-Watt: Will the Secretary of State accept from this side of the House that we shall certainly support the Government in any legislation which they bring forward with regard to equal validity in law of the Welsh language? We will not go as far as the hon. and learned Member for Montgomery (Mr. Hooson) has gone and support everything in the Hughes Parry Report.

Mr. Hughes: It is the principle of equal validity which has been accepted by the Government.

Housing

Mr. E. Rowlands: asked the Secretary of State for Wales how many houses in tender have been approved by his Department to the latest convenient date this year; how this compares with the corresponding period last year; and how the estimate for 1966 compares with last year.

Mr. Ifor Davies: Up to 16th July, 4.604 public sector houses have been approved compared with 6,304 in the same period of last year. But a number of very large schemes are on the point of being approved and my right hon. Friends expects the total for 1966 to exceed that for 1965.

Mr. Rowlands: Does my hon. Friend consider the target for this year to be sufficient for Wales? Wales not only has a lot of old property, but needs more houses for workers coming in because of new office development and industry.

Mr. Davies: The initial estimate for the number of houses in the public sector under construction at the end of June was 13,553, compared with 12,287 in the same period last year.

Mr. E. Rowlands: asked the Secretary of State for Wales how many housing


loans have been granted by local authorities in Wales this year; what is the total amount; and whether he will extend the categories of applicants for loans in order to stimulate the sale of houses generally.

Mr. Ifor Davies: During the first four months 822 loans, totalling £1,272,000, were granted. My right hon. Friend is ready to consider any representations that authorities may wish to make about the categories of persons who may apply for loans.

Mr. Rowlands: Will my hon. Friend consider extending the category of applicants to those who wish to buy houses built between the wars, which is excluded at the moment?

Mr. Davies: My right hon. Friend will be pleased to give every assistance in this matter, and paragraph 4 of Circular 16 of 1966 gives an assurance that special circumstances will be considered.

Economic Planning Councils

Mr. Anderson: asked the Secretary of State for Wales what arrangements exist for co-operation on matters of common concern between the Welsh Economic Council and the South-West Regional Economic Planning Council.

Mr. George Thomas: The two Councils exchange information regularly and have undertaken co-operative action on the Severn Bridge study. In addition, my right hon. Friend, the First Secretary of State ensures that there is full exchange of views and information between all Planning Councils.

Mr. Anderson: In the light of the Severn Bridge, with the increased trade links between the two regions, and in the light, too, of the Severnside announcements which will straddle both regions, would not my hon. Friend agree that there is a need for more formalised links between the Welsh and South-West Economic Regions? Will my hon. Friend consider the establishment of a standing committee, composed of representatives from both regions, so that there can be co-operation laterally, rather than always going to London under the aegis of the Department of Economic Affairs?

Mr. Thomas: I am satisfied that there is good co-operation between ourselves

and the South-West Economic Council, just as there is between Wales and the West Midlands, and between Wales and the North-West. If the proposal recommended by my hon. Friend is thought wise, I shall not hesitate to follow it.

Mr. Robert Cooke: Will the hon. Gentleman do everything that he can to make his Welsh friends co-operate with my West Country friends?

Mr. Thomas: The hon. Gentleman has been here long enough to know that cooperation is a characteristic of the Welsh.

Welsh Tourist Board

Mr. Gibson-Watt: asked the Secretary of State for Wales whether he will publish as a White Paper the account of his latest meetings with the Welsh Tourist Board.

Mr. Cledwyn Hughes: I met the Chairman of the Welsh Tourist Board on two occasions recently, when representations were made to me about the position of the Board and I am considering these in consultation with my colleagues.

Mr. Gibson-Watt: In view of the bad effect which the Selective Employment Tax will have on tourism in Wales, will the right hon. Gentleman say whether this is a matter which he proposes to discuss with the Welsh Tourist Board?

Mr. Hughes: I have already had discussions with the Board. The hon. Gentleman chooses to overlook what is being done to help tourism in Wales. As he knows, the industry will be eligible for substantial assistance under the Industrial Development Bill, under which most of Wales will now be scheduled. I refer the hon. Gentleman to the statement made by my right hon. Friend the Prime Minister yesterday when he announced a new scheme under which development loan assistance can be offered for the building, expansion, or modernisation of hotels which can show that they cater for overseas visitors.

Mr. Gibson-Watt: Is the right hon. Gentleman aware that a large part of the North-West of Wales is outside a development area and, therefore, will not benefit from some of the things which the Government are doing? Will he also realise that at the present time the Welsh


Tourist Board is most upset about the whole position with regard to the future of tourism in Wales?

Mr. Hughes: I do not agree with the hon. Gentleman that the Board is as upset as all that. Certainly it has points to make, and it has made them to me, and I am considering them in consultation with my Ministerial colleagues. I shall be meeting the Board again very soon for further discussions.

Mid-Wales New Town

Mr. Birch: asked the Secretary of State for Wales whether he will publish as a White Paper the findings of the technical survey for the proposed Mid-Wales new town.

Mr. Cledwyn Hughes: The report of the consultants engaged to advise on the location and feasibility of a new town in Mid-Wales is expected to be published by Her Majesty's Stationery Office on 28th July, 1966.

Oral Answers to Questions — EDUCATION AND SCIENCE

Commonwealth and Colonial Students (Private Institutions)

Mr. Moyle: asked the Secretary of State for Education and Science if he will introduce legislation to increase his control over the setting up of privately-owned institutions for adult education, particularly where such institutions offer courses to Commonwealth and colonial students.

The Minister of State, Department of Education and Science (Mr. Goronwy Roberts): No, Sir, and I do not think that in any case it would be practicable to distinguish between institutions according to whether they might offer courses to overseas students.

Mr. Moyle: I thank my right hon. Friend for that answer, but is he aware that there are a number of tutorial institutions in this country which are attracting Commonwealth and colonial students here on the basis of prospectuses which do not match performance. is not this bad both for Commonwealth relations and for education? Will he consult his right hon. Friend the Secretary of State for Commonwealth Relations to see whether increased surveillance can be exercised over these institutions?

Mr. Roberts: I have no evidence to suggest that the large majority of private institutions which operate in this field have abused their position, but I will most willingly consult my right hon. Friend on the point that my hon. Friend has raised.

Sir E. Boyle: Will the right hon. Gentleman bear in mind the fact that there might be a good case for saying that the provisions of Part III of the 1944 Act, which is concerned with the registration and inspection of independent schools, should be extended to a number of institutions which cater for pupils above school-leaving age?

Mr. Roberts: I do not agree, as of now, with what the right hon. Gentleman says, but certainly my right hon. Friend and I will take advice on it.

University Teachers' Pay (Negotiation Machinery)

Dr. Gray: asked the Secretary of State for Education and Science what progress he has now made in the establishment of new negotiation machinery for reviewing the pay of university teachers.

The Secretary of State for Education and Science (Mr. Anthony Crosland): I am in touch with representatives of the parties concerned, and hope to reach a decision soon.

Dr. Gray: Does my right hon. Friend intend to give the same status to the appropriate trade union—the Association of University Teachers—as he will give to the University Grants Committee when the new machinery is established?

Mr. Crosland: I am aware that my hon. Friend is an active and notable member of the union to which he has referred. Nevertheless, I ask him to await the proposals I am putting to the A.U.T., Vice-Chancellors and the University Grants Committee. I shall be doing this in a week or two. In fact, I am meeting the A.U.T. on Monday.

Secondary Education (Transfer Age)

Dr. Gray: asked the Secretary of State for Education and Science whether his policy of allowing local education to fix the transfer age at 11 years or 13 years from junior to senior schools was shortand long-term in its aims.

Mr. Crosland: My decision to allow an age of transfer other than 11 was explained in Circular 13/66, of which I am sending my hon. Friend a copy.

Dr. Gray: Is my right hon. Friend aware that considerable anxiety exists in the minds of many local authorities in case the Plowden Council should recommend a universal transfer age? Further, will he consider writing to local authorities and advising them how to iron out the difficulties that will arise when one authority chooses 11 years and another 13 years and they make mutual or one-sided use of each other's educational facilities?

Mr. Crosland: On the first point, we had better wait and see what the Plowden Council recommends. Certainly nobody would want to take a decision about a new national age of transfer until the Council has reported—which will not be for some time. The second point is precisely the sort of point that we shall look al: whenever proposals are put to us for middle schools.

Elstead Church of England School

Mr. Maurice Macmillan: asked the Secretary of State for Education and Science when he will sanction the minor building project requested by the managers of Elstead Church of England, Aided, Primary School and by the Surrey County Council for the purpose of providing places for all the children on the roll, presently 200 increasing by 1969 to over 250, other than the 140 sub-standard places now available.

The Minister of State, Department of Education and Science (Mr. Edward Redhead): Directly a site is obtained.

Mr. Macmillan: May I have two assurances from the Minister—first, that the lending of further mobile classrooms to accommodate the overspill pupils will in no way prejudice the speed at which sanction is granted, and, secondly, that there will be no question of any delay as a result of the statement made yesterday by the Prime Minister? The hon. Member will be aware that a site has been obtained.

Mr. Redhead: I am aware that the local education authority is negotiating this purchase, and I think that the hon. Member can be assured on both points.

Local Authorities (Departmental Correspondence)

Mr. Tilney: asked the Secretary of State for Education and Science if he will take steps by legislation or otherwise to ensure that local education authorities consider letters from his department.

Mr. Crosland: No, Sir.

Mr. Tilney: In view of the importance of the Minister's views and his change of attitude about the three-tier system of comprehensive education, may I ask him whether he is aware that the Socialist chairman of the Liverpool Education Authority deliberately suppressed letters from his Ministry? Is this not another example of the split personality of the party opposite?

Mr. Crosland: I am aware of nothing of the sort. It would be wrong and foolish of me to try to instruct local education authorities how they should deal with correspondence coming from my Department. They are quite capable of making that decision for themselves. As for the letters to which the hon. Member has referred, these were not formal letters addressed to the authority but informal letters from one of my officers to an officer in the authority, and I have no complaint of any kind about the way in which the authority chose, in its own wisdom, to deal with those letters.

Comprehensive Education

Mr. Tilney: asked the Secretary of State for Education and Science whether he will make sure that he receives the considered views of the local education authority of Liverpool on middle-schools' schemes for that city before giving his consent to any plans for the reorganisation of secondary education in Liverpool.

Mr. Russell Johnston: asked the Secretary of State for Education and Science what further action he proposes to bring to the attention of Liverpool City Council the possibility of basing its comprehensive reorganisation upon transfer to secondary school at 12 or 13 years of age.

Mr. Crosland: It is for the local education authority to decide on its proposals


for the reorganisation of secondary education on comprehensive lines. I shall consider the authority's proposals with an open mind.

Mr. Tilney: Does not the right hon. Gentleman agree that a three-tier system of comprehensive education might he very appropriate for the City of Liverpool and would be likely to save money in this time of economic crisis?

Mr. Crosland: I have no intention of trying to dictate to the Liverpool authority or any other authority what type of comprehensive reorganisation it should submit to me in its plan. It is well Known, if only from Circular 13/66, that I am prepared to consider transfers at ages other than 11; and as to the scheme they choose to submit to me, they arc the people to judge, and I have no intention of influencing their decision.

Mr. Johnston: I accept the Minister's view on this, but is not this an example of communication failure here, and if there are similar communication failures elsewhere it may make it less easy to put forward acceptable comprehensive schemes?

Mr. Crosland: I do not think that there has been a failure of communication here; on the contrary, what has happened in this case is what I am extremely anxious to encourage in all cases, namely, that before authorities submit schemes there should be the greatest possible degree of informal consultation between officers of the authority and officers in my Department. That is what happened in this case. As far as I am concerned, there was no impropriety of any kind on the part of the authority, and I make no complaint of any kind against its behaviour.

Mr. Fortescue: Is the right hon. Gentleman aware that the incident of these letters caused considerable public scandal in Liverpool and led to a great loss of confidence in the local education authority?

Mr. Crosland: There is no question of the suppression of any letters. A letter addressed by one of my officials to the chief officer of an authority can be dealt with by the authority in any way it chooses. There is no question ,of some formal communication of mine

to them having been suppressed. It is up to the authority to decide how it deals with correspondence of this kind.

Sir E. Boyle: Is not there a special circumstance in this case, namely, that the Minister had to deal severely with the Liverpool scheme when it was put forward last year? Is it not, therefore, especially important that those in Liverpool who are concerned with making the best possible plans for the future should be properly informed about the full range of possibilities open to them?

Mr. Crosland: They are perfectly fully informed without the contents of this letter necessarily having to be revealed. This letter was a letter from one of my officials in reply to an informal request for views about the possibility of 9–13 schools. This possibility is well known to the authority, and educationists in Liverpool, from the terms of Circular 13/66. There is no mystery of any kind about this.

Mr. Tilney: In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest possible moment.

Mr. Gwilym Roberts: asked the Secretary of State for Education and Science what steps he proposes to take to ensure that those local authorities which submit middle school organisations for comprehensive education maintain the spirit and philosophy of the present junior school.

Mr. Crosland: I hope that middle schools will develop a spirit and philosophy of their own. This will be mainly a matter for the local education authorities and teachers concerned, but if I feel that guidance is necessary I will give it.

Mr. Roberts: Is the Minister aware that there is very real concern among primary school headmasters, particularly where an 8–12 scheme is envisaged, that some of the opportunities for self-expression which at present exist in the primary schools will be lost and that the children will join the "rat-race" much sooner?

Mr. Crosland: No, Sir, I do not think that this view is very widely held. I


believe that most people in the educational world who favour either 8–12 or 9–13 schools would think that these schools cannot be the same as junior schools. They are catering for a different age range and it is, therefore, important that they should become a type of school in their own right. I do not think that any experiments in this direction will lead to the ill consequences which my hon. Friend described.

Mr. William Hamilton: asked the Secretary of State for Education and Science how many local education authorities have refused to submit proposals for comprehensive education; and what action he intends to take.

Mr. Winnick: asked the Secretary of State for Education and Science how many local education authorities have now submitted plans for the reorganisation of secondary education; how many authorities have now asked for an extension of time; and if any authority has chosen not to reply at all.

Mr. Crosland: Replies from the 162 local education authorities to Circular 10/65 are still coming in. It is therefore too early to give a definitive answer. But I shall make a detailed announcement before the House rises.

Mr. Hamilton: Is it not the case that a very small minority of local education authorities are deliberately seeking to defy and refuse to accept the policies of the democratically-elected Government of the country? What powers has he to bring them into line? Will he give a firm assurance that he will be prepared to use them if the authorities do not conform to national policy?

Mr. Crosland: I should like to emphasise how very small this minority is. So far, only three authorities have declined to submit plans and a tiny handful of other authorities are submitting plans patently based on the retention of selection. This is a very small minority. I should not like to take any view on whether further action is needed, and if so of what kind, until I have been able to take stock of the full response to the circular, which I hope to announce to the House before we rise.

Mr. Winnick: Is my right hon. Friend aware that, in many areas where the local

education authority is refusing to submit proposals for going comprehensive, there is a good deal of concern and anxiety amongst the parents that the local authorities are behaving in such a stupid and reactionary manner? Is he aware that, for example, there is deep concern in Croydon that the local council is refusing to cooperate with the Department?

Mr. Crosland: I am well aware of the facts which my hon. Friend has mentioned. It is true that, both in the very small number of areas which have declined to submit plans and even more in areas like the one which he has in mind, which have submitted plans which are patently not comprehensive, there is strong feeling, not only among parents but also very often among the teachers, at this failure to accept the policy of Circular 10/65.

Mr. Frederic Harris: Would the right hon. Gentleman not agree that such a progressive education authority as Croydon, which is often taken as an example for education throughout the country, is well capable of taking decisions for its education for the future, and that he should see that such authorities are entitled to do so?

Mr. Crosland: I understand that there is a certain amount of disagreement in Croydon as to what should be done, but I propose to make no statement on the Croydon position as no Croydon scheme has yet been formally submitted.

Sir E. Boyle: Will the right hon. Gentleman repudiate the lack of regard—indeed contempt—shown by his hon. Friend the Member for Fife, West (Mr. William Hamilton) for the legitimate concerns of democratically elected local authorities?

Mr. Crosland: I will certainly not repudiate him. What he was saying is what has been long accepted in this country—that there is an expectation that, in educational policy, when there is a declaration of national intent, this will be carried through by central and local government in co-operation.

Mr. Winnick: In view of the deep concern in my constituency about this matter, may I give notice that I intend to raise this matter on the Adjournment as early as possible?

Mr. Speaker: Order. I hope that notice will be given in the conventional fashion.

Mr. McNamara: asked the Secretary of State for Education and Science if he is satisfied with progress being made with development of comprehensive education in the East Riding of Yorkshire; and if he will make a statement.

Mr. Redhead: Yes, Sir. There are already two comprehensive schools in the East Riding and two others are being provided in current building programmes. The authority are expected to submit their proposals under Circular 10/65 by the end of this month.

Mr. Hamling: asked the Secretary of State for Education and Science what representations he has received on schemes for the comprehensive development of secondary schools in the area of the Inner London Education Authority; and what reply he has sent.

Mr. Crosland: The Inner London Education Authority has published Notices of nine reorganisation schemes since it came into being on 1st April, 1965. Representations have been received in four cases. Three proposals have been approved and I hope to reach a decision on the fourth shortly. There is still a month to run during which representations can be made to the Department in respect of the other proposals.

Mr. Hamling: Will my right hon. Friend bear in mind, when he receives representations criticising these proposals, that there is a great number of inarticulate people who want comprehensive education in London?

Mr. Crosland: I will bear that in mind, and I am happy to say that all those who want this are by no means inarticulate.

Universities (Industrial Research)

Mr. Wallace: asked the Secretary of State for Education and Science to what extent universities in the United Kingdom are assisting with industrial research.

Mr. Goronwy Roberts: In many different directions and on an increasingly wide scale. The universities are aware that the Government greatly welcome this development, of which I am sending my hon. Friend further particulars.

Mr. Wallace: Would not my hon. Friend agree that in this field the new redbrick universities are playing an invaluable part?

Mr. Roberts: I certainly agree. Indeed, the newer and the older universities are taking an increasing part in research projects undertaken directly for industry, and at a regional level they are taking an important part in the deliberations of regional economic planning councils.

Sir H. Legge-Bourke: Would the hon. Gentleman recognise that the more work the universities do on industrial research the more important it becomes that there is an adequate relationship between the Ministry of Technology and his Department in this respect? Is he aware that there is a growing uneasiness that the present set-up is not right?

Mr. Roberts: That is not so. There are the happiest and most fruitful relationships between my right hon. Friend's Department and that of the Minister of Technology. My right hon. Friend the Minister of Technology and the research stations for which he is responsible place important industrial contracts with universities. In the last year, the value of such contracts has more than doubled.

Preliminary Teacher-Training Courses

Mr. Hamling: asked the Secretary of State for Education and Science what discussions he has had with technical colleges and colleges of further education on preliminary teacher-training courses.

Mr. Goronwy Roberts: None, Sir. There is already extensive provision in technical colleges and evening institutes for G.C.E. and other courses leading to qualifications accepted for entry to teacher training.

Mr. Hamling: Would my hon. Friend bear in mind the need to encourage schemes for teacher-training for mature students with very little formal education behind them and particularly the need of such schemes for financial assistance to such students?

Mr. Roberts: Where there is a demand, local education authorities are normally able to provide G.C.E. and other courses


for prospective student teachers of the type my hon. Friend described, including, of course, married women during the day and those in employment in the evenings. In addition, colleges of education may, if the area training organisation agrees, admit exceptionally to teacher training, exactly the kind of aspirants whom my hon. Friend mentioned.

Children's Theatre

Mr. Scott: asked the Secretary of State for Education and Science whether he will make it a condition of grants to the Arts Council for next year that the Council earmark a sum of money to support the children's theatre.

The Joint Under-Secretary of State for Education and Science (Miss Jennie Lee): I share the hon. Member's concern for children's theatre, and welcome the fact that the Arts Council has out of the current year's allocation already offered grants towards three of our children's theatres, the Theatre Centre, the Unicorn Theatre and the Westminister Children's Theatre. The whole question of financial support for such enterprises in the future is now being examined.

Marriage Guidance

Mr. Winnick: asked the Secretary of State for Education and Science what steps he is taking to encourage schools to accept visits from the Marriage Guidance Council.

Mr. Redhead: It is for the local education authorities and the schools to decide whether to avail themselves of the Council's help. I am glad to note that many already do so.

Mr. Winnick: Is my hon. Friend aware that this organisation does a tremendous amount of good work when it is allowed to go into schools and give pre-marriage courses? Is he also aware that a number of local education authorities seem most reluctant to allow the Marriage Guidance Council to go into schools, even though the headmasters may be in favour?

Mr. Redhead: On the first point, I am of course, aware of the work of the Council in schools and other educational establishments, and I recognise that it helps to meet the needs expressed in the Newsom Report. It must be emphasised,

however, that as my right hon. Friend does not direct what the schools shall teach or how it should be taught, he must leave it to the local education authorities and schools to decide, in the light of their circumstances, the extent to which use is made of the Marriage Guidance Council.

Mrs. Knight: Would the hon. Gentleman take note of the fact that by no means all of us are happy about tiny teen-age mini-marriages, which are so frequently followed by early twenties divorce? Would he further note that the Marriage Guidance Council more properly has a two-pronged action—partly for engaged couples and partly for those whose marriages have gone on the rocks, neither of whom one would hope to find in schools, whose pupils can be more properly guided by the schools' medical officers?

Mr. Redhead: What the hon. Lady says adds point to the fact that this is very much a personal and local business, to be determined in the light of the judgment of the local authority.

Student Teachers (Grants)

Mr. Dean: asked the Secretary of State for Education and Science whether he will increase the amount of dependant's income which is disregarded in assessing the amount of grant payable to students training to be teachers.

Mr. Goronwy Roberts: No, Sir.

Mr. Dean: While not expecting to receive a particularly favourable reply now that stop-go has been replaced by stop-stop, may I ask the Minister to bear in mind the fact that the f100 disregard for a wife's income has not been increased since 1962? Will he consider this, particularly for mature students, who often find that they have a substantial drop in their income when they become student teachers?

Mr. Roberts: The grant arrangements for teacher training students generally are the same as those for all other students in higher education. My right hon. Friend and I appreciate the difficulties of the older student, the married man with family responsibilities, who is living on a grant. However, whereas his previous income was appreciably in excess


of the total grants, he may be paid an additional grant of up to £100 a year.

Direct Grant Schools

Mr. Hunt: asked the Secretary of State for Education and Science whether he will now state his policy regarding the future of the direct grant schools within the Greater London area.

Mr. Crosland: My policy for direct grant schools, which applies to those in the Greater London area as to those in the rest of the country, is explained in Circular 10/65 of which I am sending the hon. Gentleman a copy.

Mr. Hunt: Does the right hon. Gentleman recognise that he has very special responsibilities towards these schools? Will he reject the political prejudice of his hon. Friends—  [Interruption.]—both in this House and across the road in County Hall, and recognise that these direct-grant schools have a unique role to play in our educational system and that they should be supported rather than suppressed?

Mr. Crosland: There is no doubt that there is a good deal of prejudice on all sides in respect of this kind of argument. The policy for direct-grant schools is perfectly clear, and I have no doubt that it is the right one. I have asked the authorities on the one hand and the governors of the direct-grant schools on the other to get together and consult about how these schools might play their part in a system of secondary reorganisation. There are a number of parts of the country where this is occurring, and I am sure that this is the right way to proceed.

Mr. Hamling: Would my right hon. Friend agree that the Conservative Party does not help these matters by publishing confidential documents in Conservative newspapers?

Sir E. Boyle: Would the right hon. Gentleman accept that there is very deep concern felt by many people who are not unsympathetic in principle to a measure of secondary reorganisation—deep concern about the future of these schools, which are mostly of very high academic standards and to which admission is in no way dependent on accident of birth? My hon. Friends and I, also, are greatly concerned about these schools.

Mr. Crosland: I believe that all hon. Members are deeply concerned about the future of these schools. That is not in dispute. However, there is no possible single national solution to the problem of the direct grant schools. They differ so much within themselves. I am sure that the right way to proceed is to leave this matter for local negotiation between the schools and the local authorities.

Agricultural College for Wales

Mr. Elystan Morgan: asked the Secretary of State for Education and Science whether he will make a statement with regard to the establishment of an agricultural college for Wales.

Mr. Goronwy Roberts: As my right hon. Friend made clear in his reply to the hon. and learned Member for Montgomery (Mr. Hooson) on 16th December of last year, this is now a matter for the Welsh Joint Education Committee, which has not yet put a proposal to him which he could consider for a building programme.

Mr. Morgan: While thanking my hon. Friend for that reply, may I ask his Ministry to give every encouragement and leadership to the deep and widespread feeling in Wales that such a national institution should be established in Wales? Can he give an indication of whether it will be centrally situated and what negotiations are taking place between the Welsh Joint Education Committee and the Department?

Mr. Roberts: My Department is always very ready to assist this Joint Committee in everything it undertakes. Assistance is now being given to the Committee on this project. As to the proposal centrally to site this proposed college, I take my hon. Friend's point, but it must be part of the building programme as a whole. I am glad to tell my hon. Friend that the Welsh Joint Education Committee is due to have a meeting with the other bodies concerned on 25th July—

Hon. Members: Hear, hear.

Mr. Speaker: Order.

Mr. Roberts: I am delighted that this pronouncement should receive such universal approval—or is it because my


right hon. Friend the First Secretary has taken his place on the Government Front Bench? [Interruption.]

Mr. Speaker: Order. The Minister must complete his answer quickly.

Mr. Roberts: I was saying that the Committee will meet other bodies on 25th July, and officers of my Department will be there as observers.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS (CENTRAL PURCHASING AGENCY)

Mr. Dickens: asked the Prime Minister if he will consider setting up a central purchasing agency for the public sector of the economy.

The Prime Minister (Mr. Harold Wilson): I know of the proposal to which my hon. Friend refers, which is being examined. I have yet, however, to be convinced that its advantages outweigh its disadvantages as compared with the present arrangements for co-ordination.

Mr. Dickens: While I am grateful to my right hon. Friend for that reply, may I draw his attention to the fact that a central purchasing agency could play a vital part in mobilising purchasing power in the public sector? Is he further aware that, in view of yesterday's statement, many hon. Members on this side of the House regard this as a vital and urgent matter?

The Prime Minister: As my hon. Friend will be aware, there is already central purchasing for very many items which the Government buys. To take one example, there is the Ministry of Technology, which now organises the whole of computer purchases on behalf of the Government as well as, more widely, for the public sector. An interdepartmental co-ordinating committee also exists to standardise, as far as possible, Government requirements in a way to help technological advance.

Oral Answers to Questions — NATIONAL CONFERENCE ON PRODUCTIVITY

Mr. Dickens: asked the Prime Minister when he proposes to call the National Conference on Productivity; and if he will make a statement.

The Prime Minister: On Tuesday, 27th September, Sir.

Mr. Dickens: May I welcome this announcement and indicate to the Prime Minister the fact that many hon. Members on this side of the House are very glad to see the Government taking a positive initiative in this sphere?

The Prime Minister: This activity has been going on continuously through the various Departments concerned and through the economic development committees for individual industries. It has been thought desirable that we should now call together the leading representatives of both sides of industry to consider what further can be done to give a drive throughout industry to technological advance.

Mr. Jopling: In view of the Prime Minister's public commendation of the increased productivity of the agriculture industry, will he set up talks immediately with the leaders of that industry to increase production in view of the assistance that that could be to the present balance of payments crisis?

The Prime Minister: There have been a series of talks. In fact, I have had talks myself with the N.F.U. on this subject. As I have indicated previously, it is intended that the agriculture industry will be represented at this joint conference.

Oral Answers to Questions — THE PROFESSIONS

Mr. Whitaker: asked the Prime Minister whether he will recommend the appointment of a Royal Commission to inquire into the professions.

The Prime Minister: I am not aware of any widespread desire for such a Royal Commission.

Mr. Whitaker: Would my right hon. Friend reconsider the matter in the light of Early Day Motion No. 144—" Royal Commission on the Professions "—which has been signed by the members of many professions? Is it not very hard to defend the fact that a House of Commons which is disproportionately full of professional people—elected mainly on the votes of trade unionists is concerned exclusively with restrictive practices in trade unions?

The Prime Minister: It is certainly a fact that there are restrictive practices, not to say very intensive demarcation arrangements, within certain of the learned professions, and I have myself commented on the suggestion that some of the professional men who are actively concerned in promoting demarcation and restrictive practices should be asked to settle the restrictive practices in industry, but I am not sure that the appointment of a Royal Commission would be the way to deal with this question.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS (PRESS INFORMATION)

Mr. Goodhart: asked the Prime Minister when he will publish the report of the inquiry into the leakage of secret information from Government Departments to the Press.

The Prime Minister: I cannot yet add to my reply of 14th July to a supplementary question by the right hon. Gentleman the Leader of the Opposition.

Mr. Goodhart: Will the Prime Minister now expand this inquiry to cover all channels and procedures for giving advance information and guidance to the Press, in view of the considerable damage that was done to the economy last week by conflicting and incorrect guidance given at the highest levels?

The Prime Minister: No, Sir. The hon. Gentleman is quite wrong about this-[Interruption.] I have made it clear on a number of occasions that there are cases-and this has been a continuous problem, I would say, since the war-involving the leakage of secret information, but that there is appropriate machinery for dealing with this.

Mr. Heath: As it is now five weeks to the day since the Prime Minister told the House he had instituted an inquiry into the alleged leak about E.L.D.O., can he now tell us what the conclusions are?

The Prime Minister: As I told the right hon. Gentleman-I think a week ago-an interim report has been received suggesting a line for further investigation. This is now being pursued, and I expect a report on it within the next day or two,

and, as I then said to the right hon. Gentleman, I will get in touch with him right away.

Oral Answers to Questions — PRICES AND INCOMES

Mr. Goodhart: asked the Prime Minister whether he will designate one senior Minister to be responsible for enforcing the implementation of the recommendations of the National Board for Prices and Incomes.

The Prime Minister: No, Sir.

Mr. Goodhart: Is the Prime Minister aware that the failure to take action on this matter is as obvious and pathetic as was yesterday's demonstration of disagreement by his right hon. Friend the First Secretary?

The Prime Minister: The position about the recommendations of the National Board for Prices and Incomes Recommendation has been made clear in the House. Inevitably, a number of Ministers are concerned particularly when one thinks of all prices—agricultural as well as industrial. Industrial prices are the responsibility of my right hon. Friend the Minister of Labour, but my right hon. Friend the First Secretary is in charge of the general co-ordination of policy on prices and incomes—[Interruption.]—and is pushing ahead very actively—  [Laughter.] Laughter from right hon. and hon. Members opposite[Interruption.] —who talked about prices and incomes all the time they were in office and did nothing about them, is really—  [Interruption.] My right hon. Friend will be having urgent talks now with the C.B.I. and the T.U.C. about the implementation of the policy that was announced yesterday.

Mr. Frederick Harris: But does not the Prime Minister's statement of yesterday virtually nullify the work of this Board for the next six months at least?

The Prime Minister: No, Sir. It makes the Board's work a great deal more important.

Mr. Shinwell: Is my right hon. Friend aware that the First Secretary is worth a dozen of those in opposition?

The Prime Minister: I should have thought that that was a very serious underestimate.

Sir C. Nabarro: In view of the Prime Minister's statement yesterday of a wage and salary freeze for six months, followed by severe restrictions for the next six months, how does he propose to secure adherence to such a policy which is only pious aspiration unless there is some means of enforcement? And what does he propose to do with his right hon. Friend the Member for Nuneaton (Mr. Cousins) who is already defying that policy?

The Prime Minister: The policy that was enunciated yesterday is essential for the economic recovery of this country. Many have talked about these policies in the past; we have taken action over the last 18 months—  [Interruption.] We have had many disappointments [Interruption.] No one thought[Interruption.] At any rate, we have been dealing with it and not just talking about it. Whilst it is easy for right hon. and hon. Gentlemen to laugh about it, we should like to see a little more support for that policy.

Mr. Corfield: Am I to understand that the right hon. Gentleman is saying that he enunciated a policy yesterday without previously having the consultations upon which all depends whether it is possible to implement that policy?

The Prime Minister: There have been continuous discussions with both the C.B.I. and the T.U.C. on all questions of prices and incomes policy. These have been going on now for 18 months. I think that all the problems are known, but someone had to take a decision. We announced the decision yesterday, and we shall discuss with those organisations how best to implement it.

Oral Answers to Questions — DRUGS (ADDICTION)

Mrs. Reneé Short: asked the Prime Minister what administrative arrangements exist to co-ordinate the responsibilities of the Minister of Health, the Secretary of State for the Home Department, the Secretary of State for Education and Science, and the social services in order to tackle more effectively the

problem of drug addiction, especially among young people.

The Prime Minister: I would refer my hon. Friend to the Answer I gave on 24th May to a similar Question by the right hon. Member for Ashford (Mr. Deedes).

Mrs. Short: Is my right hon. Friend aware that that is a very unsatisfactory reply? Is he aware that there is very serious concern about the lack of Government activity in this matter since the publication of the Brain Report last November? Is my right hon. Friend aware that while the Government are doing nothing children of 11 and 12 are getting "hooked" on hard drugs? Does he not think that this is a matter of very grave concern and one on which action should be taken'?

The Prime Minister: I agree that there is very widespread concern on the question and that there is every reason for that concern, but it does not mean that because of that concern we should proceed to get the wrong answer in terms of inter-departmental co-ordination. Obviously, in their different spheres, all three Departments are concerned with the problem, and we are considering whether any changes in inter-departmental arrangements are required. The projected Medicines Bill will affect the distribution of some of the functions, and we shall then have to decide whether any changes are needed.

Mr. Hogg: But is not the Prime Minister aware that the real key to this problem lies in legislation, both on the control of drugs and on the unlicensed clubs where the drugs are peddled? Will he not undertake to find Government time for this legislation, even if it means squeezing out some of his more controversial Measures?

The Prime Minister: I agree that this is partly a question of legislation, and hon. Members on both sides in this Parliament, the previous Parliament and the Parliament before that have been particularly concerned about the inadequacy of control over clubs. Many of us have said that in our debates on these clubs. Certainly, legislation is needed, certainly it will be introduced on the first possible occasion, but there is a lot of other action that has to be undertaken, too.

Oral Answers to Questions — SECRETARY OF STATE FOR DEFENCE (SPEECH)

Mr. Blaker: asked the Prime Minister whether the public speech by the Secretary of State for Defence at a meeting of Socialist Commentary in London on 25th June about the present peacekeeping capability of the United Nations represents the policy of Her Majesty's Government.

The Prime Minister: My right hon. Friend made no statement of policy on this subject on that occasion.

Mr. Blaker: Is the Prime Minister not aware that it has been reported that his right hon. Friend said on that occasion that there is no chance at present of the United Nations being able to carry out the task of a policeman east of Suez? If that is so, who will be responsible for helping with the defence of South Arabia if she needs help?

The Prime Minister: What my right hon. Friend actually said was that there was no chance at present of the United Nations being able to take over the policing or peace-keeping task which we have been carrying out in pursuance of our Commonwealth and other obligations. This is not a statement of Government policy, as asked for in the Question, but states the fact.

Sir Alec Douglas-Home: I do not think the Prime Minister has quite faced up to the quotation from his right hon. Friend's remarks. If the British Government are to give up their obligations to defend South Arabia and the United Nations, according to the Secretary of State, is incapable of taking them on, on whom are the Southern Arabians to rely?

The Prime Minister: My right hon. Friend was not referring to the situation in South Arabia. I have quoted what my right hon. Friend was actually saying on the occasion. The position is, as we have said many times in this House, that this country cannot take on unilaterally the role of world policeman in South Arabia and the rest of the world. We have to do whatever we can within our resources, without overstraining them, for the United Nations, the Commonwealth and our allies.

Sir Alec Douglas-Home: But does the right hon. Gentleman say that his right hon. Friend the Secretary of State did not use the words that there was no chance at present of the United Nations being able to carry out such a task?

The Prime Minister: I have quoted the exact words used by my right hon. Friend as he has told them to me, and I do query the accuracy of what, I think, is the Sunday Times report from which the right hon. Gentleman is quoting. The words I have quoted are the words used by my right hon. Friend.

Oral Answers to Questions — OFFICIAL CAR (USE)

Mr. Patrick Jenkin: asked the Prime Minister who gave authority for the use of official car, registered number 919 CLD, on Friday 1st July to convey Professor T. Balogh and a lady from Hampstead to the West End of London; and why an official car was put at Professor Balogh's disposal on this occasion.

The Prime Minister: The use of this car to bring Dr. Balogh to the Cabinet Office had been authorised under the normal rules governing the use of official cars. The lady who travelled in the car on this occasion was another member of the Cabinet Office staff, who travelled with him in order to discuss necessary official business.

Mr. Jenkin: Will the Prime Minister confirm—[Interruption.]

Mr. Speaker: Order. I want to hear the supplementary question.

Mr. Jenkin: Will the Prime Minister confirm that there has been no change in the list of persons designated in a very long reply on 3rd December, 1951, by the then Prime Minister, Mr. Churchill, of the people who are entitled to use official cars for personal use on the grounds that they require police protection?

The Prime Minister: If the hon. Gentleman had not withdrawn this morning the Question he had intended to put, he would have had a full answer to the effect that the rules regarding the use of official cars are exactly the same as those carried out by our predecessors. As for Dr. Balogh, as the House knows, he had a very severe heart attack last year—


[Interruption.] Hon. Members opposite, I know., are capable of sinking pretty low on occasion. In accordance with the rules, he was authorised to be brought into work by car. I suggest to the hon. Member, who boasted to the Press that he had followed this car around in his own car for mile after mile, that if his hobby is collecting motor car numbers he would be better employed consulting my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis), who could teach him a lot about numbers.

Mr. C. Pannell: Is the Prime Minister aware that it usually falls to the incoming Minister of Public Building and Works to look into this matter and advise the incoming Prime Minister? Will he accept my assurance that the rules under which we moved and under which the car was assigned were not at all different in the rake-over in 1964 from those of the last 13 years? Is he also aware that our conduct and control of cars will stand up very favourably compared with that of our predecessors? I state that from personal knowledge.

The Prime Minister: It is a fact that my right hon. Friend did give me the advice required on these occasions. His advise was followed. There was no change in the practice which has been followed exactly by this Government as under the preceding one, but we have not used back-benchers to drive round London to spy on the situation.

Mr. Patrick Jenkin: rose—

Hon. Members: Sit down.

Mr. Speaker: Order. A little quieter, please.

Mr. William Hamilton: On a point of order. Is it necessary to carry on with this squalid exercise?

Mr. Speaker: Order. I am afraid the House must leave the control of Questions to the Chair.

Mr. Shinwell: Further to that point of order, Mr. Speaker. Would you not think it desirable in the circumstances that the Leader of the Opposition should repudiate his hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin)?

Mr. Speaker: Order. The right hon. Gentleman is not without Parliamentary

experience and knows that that is not a point of order.

Mr. Patrick Jenkin: rose—

Mr. Manuel: Go back into the sewers.

Mr. Jenkin: Will the Prime Minister accept that, in the light of his reply, of course I withdraw any possible accusation of impropriety in this case? Will he also accept that, so far from following this car round the streets of London, my journey in this case happened to coincide with it but that it diverged when I took the direct route to this House?

The Prime Minister: I read the statement which the hon. Member rushed to make to the Press when he put this Question down and also his account of the particular journey he undertook on that occasion. I am sure the whole House will be glad to welcome his apology, which gives me the opportunity of saying that I believe it is contrary to the practice of this House for hon. Members to put down Questions attacking people who cannot defend themselves, but so long as there are any hon. Members left to follow that practice they will be answered with all the rigour of which we are capable.

BUSINESS OF THE HOUSE

Mr. Heath: May I ask the Leader of the House whether he will state the business of the House for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Herbert Bowden): Yes, Sir. The business for next week will be as follows:
MONDAY, 25TH JULY—Second Reading of the Iron and Steel Bill and of the Malawi Republic Bill [Lords].
Motion on the Professions Supplementary to Medicine Order.
TUESDAY, 26TH JULY—Debate on Economic Affairs [1st Day].
Thereafter, Second Reading of the Lesotho Independence Bill [Lords], and of the Botswana Independence Bill [Lords].
Lords Amendments to the Law Reform (Miscellaneous Provisions) (Scotland) Bill, the Overseas Aid Bill and the Ministry of Social Security Bill.
WEDNESDAY, 27TH JULY—Supply [4th Allotted Day]: Committee. Debate on Economic Affairs [2nd Day].
At the end of this debate the House will be asked to take decisions on the Motion on the Surcharge on Revenue Order and on the Opposition Prayer on the Hire Purchase Order.
THURSDAY, 28TH JULY-Third Reading of the Finance Bill.
At seven o'clock, opposed Private Business.
Remaining stages of the Malawi Republic Bill [Lords], the Lesotho Independence Bill [Lords] and the Botswana Independence Bill [Lords].
FRIDAY, 29TH JULY-Motions on the White Fish and Herring Subsidies (Aggregate Amount of Grants) Order and the (United Kingdom) Scheme, the Police Pensions Regulations, the Double Taxation (Finland) Order, and the Immunities and Privileges Order.
MONDAY, 1ST AUGUST-The proposed business will be: Selective Employment Payments Bill.
Completion of the Committee stage.
I think that I should say a further word about the rising of the House for the Summer Recess. I am now hopeful that it will be possible to propose that the House should adjourn on Tuesday, 9th, or Wednesday, 10th August. The exact date must depend on the progress of business.

Mr. Heath: Will the right hon. Gentleman note that we deplore that he should be providing a day on Monday for the Second Reading of the Iron and Steel Bill and that concerning the debate on economic affairs, on Tuesday and Wednesday, we shall be tabling today a Motion of censure on the Government for their economic incompetence?

Mr. Bowden: I note both those points.

Mr. Lubbock: May I ask the Leader of the House two questions? In connection with the Botswana Independence Bill, may we take it that a full statement will be made about the aid which will be given by Great Britain to Botswana after independence, on which discussions have recently taken place with the Prime Minister?
Secondly, following the right hon. Gentleman's announcement of the likely starting date of the Summer Recess, can he say at this stage when it is likely that we shall reassemble after the Recess, in view of the number of visits to Corn-wealth countries planned by hon. Members for late in the autumn?

Mr. Bowden: I cannot this afternoon state the proposed date of our return after the Recess. I shall try to help the House by making an announcement on Thursday next week. On the other point, I shall consult my right hon. Friend to see what can be said.

Mr. J. Hynd: Can my right hon. Friend tell us when the White Paper on transport is now likely to be introduced and whether there will be a debate on it before the Recess?

Mr. Bowden: I cannot give the actual date for production of the White Paper. I think that I am right in saying that it will be early next week, but there will not be time for a debate before the Recess.

Mr. Braine: Can the Leader of the House say whether, in view of the fact that the Brain Committee on Drug Addiction made recommendations as long ago as last November, and ever since the medical profession has been urging the Minister of Health to set up treatment centres—which does not require legislation, but firm decision—can the right hon. Gentleman say whether the Minister of Health will be making a statement on this subject early next week?

Mr. Bowden: I cannot say, but I will draw the attention of my right hon. Friend to that question.

Mr. William Hamilton: Can my right hon. Friend answer two questions? In view of the fact that the Selective Employment Payments Bill may be declared not to be a Money Bill, will he sponsor, support or give Government sanction to the Bill which I introduced to remove the delaying powers of another place? Adding point to that, is it not the case that the Iron and Steel Bill is likely to be fairly controversial and that it is important, therefore, to take steps to cut the powers of the other place?

Mr. Bowden: My hon. Friend will be aware that there was contained in the


Queen's Speech a reference to the delaying powers of another place.

Mr. MacArthur: Is the Leader of the House aware that important Amendments dealing with selective employment payments in Scotland are unlikely to be reached today because of the harsh timetable he has imposed on the Bill? Will he now provide some extra time so that these vital questions can be discussed?

Mr. Bowden: No. We debated this at length on Monday. It was a decision of the House that the Bill should be time-tabled. The choice of Amendments to be discussed is very largely in the hands of the Opposition.

Mr. Hooley: Has my right hon. Friend noted Motion No. 135? If so, will he give time to debate the political consequences of the recent decision of the International Court of Justice on South-West Africa?

[That this House, while recording its deep appreciation of Her Majesty's Government's support for the principles of self-61etermination and civil rights as expressed in its policies towards Rhodesia, Bechuanaland, Swaziland and Basutoland, believes that the need to guarantee the genuine independence of states with African majority rule and the possible implications of the forthcoming judgment by the International Court of Justice on South-West Africa necessitates co-ordinated social economic and strategic planning by Her Majesty's Government towards Southern Africa as a whole.]

Mr. Bowden: I cannot promise time. My hon. Friend might take the usual opportunities during the Adjournment debate for the Summer Recess or on the Consolidated Fund Bill.

Sir D. Renton: During the debate on the economic situation will the First Secretary of State be given an opportunity to say why he offered to resign and the Prime Minister an opportunity to say why the offer was not accepted and the First Secretary of State a further opportunity to say why the offer was not persisted in?

Mr. Bowden: It is not for me to say what will be in order in the economic debate, but I am sure that the right hon. and learned Gentleman will agree with

me when I suggest to him that he should never even offer to resign.

Mr. Atkinson: Would not the Leader of the House agree that the business he has announced is a great deal of domestic trivia? In view of our experience on the Second Reading of the Prices and Incomes Bill, when back benchers were allowed a mere two and a half hours in which to put their point of view, has not the time arrived when we should revert to the previous practice of devoting two or three days to the Second Readings of all major Bills brought before the House?

Mr. Bowden: This would reduce the amount of legislation.

Sir C. Osborne: As to Monday's debate on the Iron and Steel Bill, will the Leader of the House give an assurance that full details will be given as to how the take-over is to be paid for, since it will cost about £600 million, and the 2½ per cent. Daltons issued in 1947—

Mr. Speaker: We cannot go into the merits of the debate.

Sir C. Osborne: No. I am asking for an assurance as to how the finance is to be raised.

Mr. Speaker: This is a point which I believe will arise on Monday.

Sir F. Bennett: Further to the question asked by my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton), and without going into personalities, can we be told by the Leader of the House whether the expected statement on the future of the Department of Economic Affairs is to be made separately next week or during the course of the economic debate?

Mr. Bowden: It would be quite in order to raise this during the economic debate.

Mr. Hector Hughes: As the Iron and Steel Bill is likely to be highly controversial, will the Leader of the House introduce a timetable to prevent the Opposition from wasting time, as they did last week on other Bills?

Mr. Bowden: Perhaps we ought to make a little progress with the Bill and then decide what we should do later.

Mr. Hooson: This may be an appropriate day to ask when the annual debate on Welsh Affairs is likely to take place.

Mr. Bowden: During the current Session, probably a little later.

Mr. George Jeger: Is my right hon. Friend aware that the Veterinary Surgeons Bill [Lords] went through the procedure yesterday of receiving its Second Reading in the new Second Reading Committee? Would my right hon. Friend say when the Bill will be brought before the House for its further stages?

Mr. Bowden: I cannot say at this stage, but it will come before the House. I am glad to know that the Second Reading procedure is working so well.

Mr. Biffen: Will the White Paper promised to us during the course of the Prime Minister's statement yesterday be available to the House before the debate on economic affairs next week?

Mr. Bowden: I cannot make a firm promise, but I will certainly look at this question.

Mr. Emrys Hughes: Has the attention of the Leader of the House been drawn to Motion No. 148, entitled "Needless National Expenditure on the Polaris Programme"?

[That this House, while welcoming all reasonable steps that Her Majesty's Government is taking to deal with the financial crisis and to restore national solvency, regrets that no proposals were made by the Prime Minister to end the heavy and needless expenditure on the Polaris submarine programme and for abandoning of the Polaris base at Faslane.]

Is my right hon. Friend aware that, owing to the urgency of the Iron and Steel Bill, we are not asking for a day to discuss the Motion next week, but will he keep it high on the list of priorities when the next instalment in cuts in national expenditure comes along?

Mr. Bowden: Without commenting on the second part of my hon. Friend's question, it would be quite in order to raise during the economic debate what he referred to in the first part of his question.

Mr. Stratton Mills: Will the Leader of the House confirm that the Bill to deal

with pirate radio will be published before the Summer Recess and, further, that the White Paper on the future of broadcasting is not to be published till after the Summer Recess?

Mr. Bowden: The Bill will be published before the Summer Recess. There will be no time to make further progress on it. I still cannot give a firm answer about when the White Paper will be published.

Mr. Monro: Does the Leader of the House realise that this reply to the question asked by my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) was not good enough? Will he give more time to Scotland?

Mr. Gwilym Roberts: In view of the various claims for legislation, would not the Leader of the House agree with me that it is now high time for the Government to introduce, unilaterally, reform in the procedure of the House so as to speed up legislation by cutting down the time allotted to speeches and, therefore, being able to get more debates in?

Mr. Bowden: In reply to the hon. Member for Dumfries (Mr. Monro), the Selective Employment Payments Bill is subject to a timetable. The timetable Motion was discussed on Monday of last week. The Scottish aspect of it comes within the timetable.
In reply to my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts), reform in our procedure is very largely a matter for the House. I wish that a method could be devised of restricting the length of speeches. Then we might make more progress.

Sir A. V. Harvey: Will a day be allotted for a debate on civil aviation before we rise, because it has been suggested that tens of millions of pounds may be spent in North America on buying civil aircraft which could be made in this country?

Mr. Bowden: There will be no debate in civil aviation in Government time before the Summer Recess, but the hon. Gentleman might take the opportunity of raising this subject on the Adjournment or on the Consolidated Fund Bill.

Mr. G. Campbell: Will the Leader of the House reconsider his reply on the important question of the adverse effects


of the Selective Employment Tax on Scotland, because the fears which I expressed last week before the timetable Motion was formulated have been realised?

Mr. Bowden: Perhaps the hon. Gentleman would consult his Front Bench and arrange to divide the time between them.

Mr. Edward M. Taylor: Is the Leader of the House aware of the very real confusion which has arisen in Scotland as a result of the Prime Minister's reference yesterday to the 6 per cent. electricity price increase to come into effect on Monday? Will he arrange for the Secretary of State or for the Minister of Power to make a statement, or answer a Question on Monday, saying whether this 6 per cent. increase will come into effect?

Mr. Bowden: Perhaps the hon. Gentleman would ask his question during the economic debate on Tuesday or Wednesday.

Hon. Members: It will be too late then.

Mr. Evelyn King: Has the Leader of the House noted Motion No. 143, in which a number of hon. Members draw attention to the imprisonment of a distinguished British journalist in Africa on charges which many of us think to be bogus and which offend equally against the liberty of the individual and the freedom of the Press?

[That his House, nurtured in the tradition of a free Press, notes that the Government of Sierra Leone, which is in receipt of economic aid from the British Government, has imprisoned Mr. David.Loshak, of the Daily Telegraph, who in the course of his duties reported the fact that the Sierra Leone Government now has £33 million of short-term debts and was in his view in economic difficulty; recalls that over the last 18 months 10 British newspaper correspondents representing a wide variety of political opinion have been expelled from Commonwealth countries; resents any attempts which may be made to censor dispatches intended for British newspapers, and calls upon Her Majesty's Government in Great Britain to take strong action to secure the release of any British subject who may be wrongfully detained in an African prison.]

Would the Leader of the House find time for a debate on the Motion? In considering this request, will he bear in mind that the Secretary of State for Commonwealth Relations may well wish to explain what action he has taken and why he has so far expressed no sympathy for Mr. Loshak?

Mr. Bowden: It is not possible for me to add to the statement made by my right hon. Friend in reply to a Private Notice Question.

Mr. Kershaw: Is there likely to be time next week for a statement on the doctrine of Ministerial responsibility, since the right hon. Member for Nuneaton (Mr. Cousins) was for a long time, and the right hon. Member for Belper (Mr. George Brown) is still, in a Cabinet with whose policy they both entirely disagree?

Hon. Members: Answer.

Mr. Mawby: Has the right hon. Gentleman's attention been drawn to Motion No. 152?

[That this House congratulates the right hon. Member for Belper on his very wise decision in offering his resignation from the Government.]

In view of the bewilderment throughout the country caused by the blowing hot and cold of the First Secretary of State, can the right hon. Gentleman provide an early day to debate the Motion?

Mr. Bowden: Nothing arises from that question for me on the subject of business.

Mr. Buchanan-Smith: Ts the Leader of the House aware that his treatment of Scottish affairs is utterly deplorable? Is he further aware that, in the debates on the Selective Employment Payments Bill, Scottish Members are virtually gaged. with no opportunity to explain on behalf of their constituents the severe effects of the tax in Scotland?

Mr. Awdry: In view of the Prime Minister's appeal yesterday for national support for his measures and the obvious need for that national support, will the right hon. Gentleman think again about having the Second Reading of the Iron and Steel Bill next week, in view of its controversial nature?

Mr. Bowden: No Sir. The date of Second Reading has been annnounced by me on three occasions. It is on Monday of next week.

Mr. Onslow: Can the right hon. Gentleman say whether the Minister of Aviation is likely to make, before the House rises, any of the number of important statements due from him on various projects?

Mr. Bowden: If the hon. Gentleman will specify the particular project he has in mind, I will consult my right hon. Friend.

Mr. Ridley: Will a statement be made before the Recess on the result of the First Secretary's soundings as to whether the United Kingdom can negotiate for membership of the Common Market?

Mr. Bowden: I would like to consult on that Question. Perhaps I can write to the hon. Gentleman.

NEW MEMBER SWORN

Gwynfor Richard Evans, esquire, for Carmarthen.

OATH OF ALLEGIANCE (WELSH LANGUAGE)

Mr. Gwynfor Evans: Mr. Gwynfor Evans On a point of order, Mr. Speaker. May I have leave of the House to take the Oath now in the Welsh language?

Mr. Speaker: I am grateful to the hon. Member for Carmarthen (Mr. Gwynfor Evans) for indicating to me that he might make this request this afternoon. I have had time to consider it.
The hon. Gentleman will appreciate that as Speaker I am bound, as he now is, by the practice and rules of the House. He is fully entitled to raise this matter, as he has done, at once, and he has done it courteously. I sympathise with his desire to speak in one of the great languages of the United Kingdom, especially as both my father and my mother were Welsh. What I am going to say, however, is in line with the Ruling giving by one of my predecessors, who himself spoke fluent Gaelic, but who, like myself, was bound to observe and uphold the rules of the House.
The rule is that hon. Members must address the House in English. The hon. Gentleman will find it in Erskine May, on page 441. The purpose of the rule is not to elevate the English tongue above others, but to ensure that the valuable contributions to debate which all hon. Members make can be understood by the others. My predecessor, when he was asked to permit a speech in Welsh, reminded the House of the words of St. Paul in the First Epistle to the Corinthians, Chapter 14, verse 9:
…except ye utter by the tongue words easy to be understood, how shall it be known what is spoken?
The rule is also based on practical considerations. The OFFICIAL REPORTERS in the Gallery are not required to have any knowledge of the Welsh language and it would make their task infinitely more difficult if hon. Members were to speak in languages other than English. I hope, therefore—and I speak most sincerely—that the hon. Gentleman will understand that, in ruling against his request, I am not doing so in any sense of rebuke or of any disrespect to a very noble language, but I must rule as I have ruled.

Mr. Gwynfor Evans: Further to that point of order, Mr. Speaker. May I say that this Parliament is the only Parliament that Wales has, that Wales is a nation with a national language that has been spoken there for nearly 2,000 years and that the people of Wales will regard it as an affront if that language cannot be spoken now in this House at least to take the Oath?
In view of the great national awakening in Wales, may I ask you again to allow me to take the Oath in Welsh?

Mr. Speaker: I appreciate—

Several Hon. Members: rose—

Mr. Speaker: Order. One of the rules of order of the House is that when Mr. Speaker is on his feet hon. Members remain seated.
I appreciate the utter sincerity behind the remarks of the hon. Member for Carmarthen but, as I have said, I am bound by the rules of the House.

Mr. Emrys Hughes: Further to that point of order, Mr. Speaker. While I respect your Ruling, could not the difficulty of the OFFICIAL REPORTERS be got


over by employing a tape recorder, which does not understand English or Welsh?
With regard to precedent, are you aware that your predecessor, in ruling on the question of the Oath in the time of Mr. Charles Bradlaugh, frequently made mistakes and that sometimes there is a need for discarding precedents? Are you also aware that when this House goes to another place the Queen's Assent is in the language of Norman French—" La Reyne le veult." I respectfully submit that the commonsense thing in these circumstances is to make a new precedent.

Mr. Speaker: The House is bound not only by precedent, but by its rules and its orders. I have a duty to the House to keep it to the rules and the orders. I am frequently invited to
Wrest once the law to your authority ".
The answer I must always give is that
It must not be …
'Twill be recorded for a precedent;
And many an error, by the same example. Will rush into the state: it cannot be.
If the House wants to change its rules and its orders it can do so, but I must carry out the rules.

Mr. Hooson: Further to that point of order, Mr. Speaker. As I understand, the request of the hon. Member for Carmarthen (Mr. Gwnfor Evans) is not that he should address the House in Welsh, but that he should take the Oath in Welsh. While I appreciate your Ruling with regard to the practicality of this, in that we must understand each other across the Floor of the House, nevertheless, as this is the on!), Parliament in the United Kingdom for those who are Welsh speakers, English speakers or Gaelic speakers, surely they are entitled to take the Oath in their own language. That is surely a different matter.
The hon. Gentleman has already taken the Oath in English and has thereby shown that he acknowledges that English is a common language for us. Nevertheless, as the Welsh language is his language, as it is mine, surely it is a perfectly reasonable request that he should be allowed to take the Oath in Welsh. [Interruption.]

Mr. Speaker: Order. I am being addressed on a point of order.

Mr. Hooson: It is my recollection that the late Sir Winston Churchill used Welsh in the House and was not thereby called for a breach of order. When the Office of Secretary of State for Wales was set up by the last Labour Government, Welsh words of acclamation and congratulation were used in the House by hon. Members who were not called out of order.
I quite understand that English is the language of the House, but do I understand that, from the precedents, your Ruling, Mr. Speaker, is that the hon. Member cannot take the Oath in the Welsh language? This is a matter of the greatest importance to us in Wales. If this is to be the Parliament of the United Kingdom, at least we have the right to be heard. I ask for your Ruling. I respectfully submit that the hon. Gentleman is entitled to take the Oath in Welsh.

Mr. Speaker: I have heard the hon. and learned Gentleman at length because I have a deep feeling for the hon. Member for Carmarthen, who desired to take the Oath in Welsh, and I appreciate all the deep issues. I am aware of all the factors which the hon. and learned Gentleman has mentioned. I have made the Ruling. He must accept it.

Mr. Elystan Morgan: Without challenging your Ruling, Mr. Speaker, the hon. Member for Carmarthen (Mr. Gwynfor Evans) has taken the Oath in the English language and is, therefore, a sworn Member of the House. As I understand his request at this stage is that he should translate that Oath into the Welsh language, which is his first language, as it is for many of us.

Mr. Speaker: I assure the hon. Gentleman that I understood what the new hon. Member was seeking to do and that the House understood. The House knows that he has taken the Oath in English and I rule as I have ruled.

Mr. Bence: On a point of order. Am I to assume from your Ruling, Mr. Speaker, that if a Welshman, born in a remote part of Wales and learned only in the Welsh language, was duly elected to the House, as he could not speak English, would not be eligible to serve in the House?

Mr. Speaker: The hon. Member knows that the Chair never rules on hypotheses. The Ruling is as I have stated.

Mr. Stainton: Further to that point of order. I hope to make my observations quite objectively and humbly, but it struck me that your Ruling, Mr. Speaker, was very much tilted within the terms of a discourse or debate in the House. I could not myself relate it with a Ruling or precedent on taking the Oath.

Mr. Speaker: When an hon. Member asks to take the Oath, he has to speak to take the Oath. In this case, the hon. Member wished to speak in another language. Erskine May lays down that hon. Members must address the House in English.

Mr. Heffer: I am not a Welshman. May I respectfully ask whether the Leader of the House will consider sending this matter of taking the Oath to the Select Committee on Procedure so that it can consider the taking of the Oath in Welsh or any other language which is acceptable within the United Kingdom Parliament?

Mr. Speaker: It is always in order for Parliament to change its own rules and procedure. It is not in order for Mr. Speaker to do so. If the House chooses to decide otherwise, it can always do so.

Mr. Alasdair Mackenzie: As a Gaelic-speaking Highlander, I welcome the hon. Member for Carmarthen (Mr. Gwynfor Evans). Wales has made history today by sending the hon. Member here. The point is abundantly clear. I am sure that it is the wish of the House that he should be able to take the Oath in his own language. That is entirely different from addressing the House. Speaking as one who acquired English as a foreign language, I consider that any hon. Member taking the Oath should be able to do so in the language of his heart.

Mr. Speaker: I have as profound a sympathy with the Gaels as with the Celts, but I have ruled on this issue. The House may choose to debate it at some time, but it must accept my Ruling. We must get on with the business.

The Lord President of the Council and Leader of the House of Commons (Mr. Herbert Bowden): With respect to yourself and your Ruling, Mr. Speaker, which every hon. Member understands perfectly well, I think that a valid point

is at issue and that it may be an advantage for a Select Committee to consider this matter, if that is the wish of the House. If an hon. Member has taken the Oath in English, and would like to take it in another of the great languages of the country, perhaps he should be allowed to do so. I understand that there is provision for a Member to affirm if he does not wish to take the Oath on the Testament and there is probably also a provision somewhere—I will check this—for a Member who might be a Hindu or Parsee, for instance, to take the Oath in his own way. Perhaps this is an issue which we can consider sympathetically.

Sir D. Renton: Surely the important thing about taking the Oath is that it should bind the conscience of the hon. Member. If the hon. Member for Carmarthen (Mr. Gwynfor Evans) feels in his own mind that his conscience will be more greatly bound by taking the Oath in Welsh, having already taken it in English, I humbly submit that he should be given the opportunity of taking it in Welsh.

Mr. Speaker: I am surprised that the right hon. and learned Gentleman should question a Ruling of the Chair. I want the House to understand that the Chair has ruled. It is in order for the House to change its rules at any time and if it did so it would obviously take into consideration the various arguments and the various factors which have arisen in today's rather important discussion. I must ask the House now to accept my Ruling and to get on with the business of the day. Mr. Grimond.

Sir Harmar Nicholls: On a point of order.

Mr. Speaker: Order. I called the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond).

Mr. Grimond: On a point of order. Without in any way wanting to dispute your Ruling, Mr. Speaker, may I, through you, ask the Leader of the House what steps he has in mind for carrying out what most of us would regard as a very desirable reform? There are many hon. Members who feel that addressing the House in Welsh is totally different from taking the Oath in Welsh, which is a personal matter for the hon. Gentleman.
We are greatly encouraged by the right hon. Gentleman saying that he will consider this matter, but what form will that consid2ration take?

Mr. Bowden: There has not been much opportunity as yet to give this matter a great deal of thought, but I think that the right thing to do is to look at the precedents, to consult the Clerks and the Chair and to talk about this matter through the usual channels in the first place.

Mr. C. Pannell: On a point of order. The Oath is governed not by Mr. Speaker, but by Statute. There would have to be a new enactment to alter the Oath.

Sir Harmar Nicholls: On a point of order. Are we to assume, after all, that the hon. Member for Carmarthen (Mr. Gwynfor Evans) has now made his maiden speech?

Mr. Speaker: This is something on which the Chair might be given discretion. I rule that he has not made his maiden speech. I end this matter by saying that I am sure that the House will want to welcome the new hon. Member and to congratulate him on raising an issue, on which he rightly feels keenly, with such dignity and courtesy.

Orders of the Day — SELECTIVE EMPLOYMENT PAYMENTS BILL

[2ND ALLOTTED DAY]

Considered in Committee [Progress, 20th July].

[Sir ERIC FLETCHER in the Chair]

Clause 2.—(SELECTIVE EMPLOYMENT REFUND.)

Amendment proposed: In page 2, line 23, at the end, to insert the words:
(2) This section applies to the employment of any person who is registered as a disabled person in any establishment or activity not mentioned in sections 1, 3, 4. 5, 6 of this Act, or in other subsections of this section ".

Question again proposed, That those words be there inserted.

4.10 p.m.

The Chairman: It might be for the convenience of the Committee if I indicate how the provisions of the Guillotine Order will operate today.
The time which has elapsed between 3.30 p.m. and the beginning of the consideration of the Bill is 40 minutes. The result is that proceedings on Clause 2 will be brought to an end at 7.10 p.m.; the proceedings on Clauses 3 and 4 will be brought to an end at 9.40 p.m; and the proceedings on Clauses 5 and 6 will be brought to an end at 12.10 a.m.

Mr. Raymond Gower: I wish strongly to support the Amendment, which was moved so clearly, cogently and effectively late last night by the hon. Member for Cheadle (Dr. Winstanley). I also wish to speak to my Amendment, No. 130, in page 2, line 38, at the end to insert:
(c) the establishment employs among its employees at least 5 per cent. who are registered disabled workers.
which you kindly ruled, Sir Eric, will be discussed at the same time. That Amendment specifies that an establishment has among its employees at least 5 per cent. who are registered disabled workers. In both of these Amendments we are not referring to all the people who suffer from physical disabilities. We have restricted the Amendments to those persons coming within the category of registered disabled.
As the hon. Member for Cheadle pointed out, this class of people is easily identified, which destroys the force of so many of the arguments which have been advanced by Treasury Ministers in rejecting similar appeals on behalf of the employment of part-time employees and other categories in earlier debates.
I would like to emphasise that we are now considering the interests and welfare of a large number of people. There were, unfortunately, as many as 459,000 persons on the Disabled Persons' Employment Register last February, the last month for which I have been able to obtain figures. Of that figure, 47,000 were unemployed, that is, more than 7 per cent. of the total. By May the number of registered disabled unemployed had fallen to about 44,000. I hope that the Minister will not seek to minimise the difficulties and problems of the registered disabled.
From his professional experience the hon. Gentleman the Member for Cheadle has explained how employment is often much more precarious for these people than for fit people. I would like to emphasise the very real difficulties there are in many cases for those who do the valuable work of placing such people in suitable jobs. Sometimes disabled people have great difficulty in keeping these jobs.

4.15 p.m.

If, as the Prime Minister anticipates, unemployment is likely to increase, even to the sort of figure which he had in mind, the employment of registered disabled seems certain in some cases to become more precarious. It has been claimed that many of these people are employed in sheltered employment with various organisations, particularly Remploy Ltd. That is true, but very many persons are in less sheltered occupations and there is a lot of evidence that most disabled persons seem to be less adversely affected by their disabilities when they work alongside other persons who are not similarly disabled.

It will not be an answer to our plea to say that the employment position of agencies such as Remploy might be expanded. That is of undoubted value but the most desirable thing is to place as

many of these unfortunate people as possible in general employment, in all kinds of jobs where they will be working alongside others who are not disabled. We want them in the general manufacturing industry, the service industries, the hotel and catering industry, office and shops. We want them everywhere, where-ever they can be usefully employed. it has been claimed that some of the registered disabled are protected by the quota of 3 per cent. fixed by earlier legislation.

This is true, but I would remind the Committee that a very large proportion of these people work in establishments where enlightened and sympathetic employers have long exceeded this quota. I can cite from my own experience many factories in the trading estates in South Wales—and I am sure that other hon. Members can give examples from other parts of the country—where employers, some of whom came here as refugees from Hitler's Germany and Czechoslovakia, have done a magnificent job in exceeding this quota. Often this has been in quite small undertakings. Where more than 20 people are employed, and they are bound by the quota, sometimes the percentage of disabled persons employed has been as high as 4 per cent. or 5 per cent.

It is for this reason that if the Government cannot accept the Amendment of the hon. Gentleman the Member for Cheadle I have put my Amendment down in more narrow terms. I merely suggest that in an establishment there shall be at least 5 per cent. registered disabled. That is going far beyond the 3 per cent. quota and would be a very reasonable requirement. Such an establishment should be in no way inhibited from continuing such splendid work.

Others work in smaller establishments where the quota is not binding. Again, it would be unfortunate if we had to compel the employment of disabled persons in such establishments. I ask the Minister, "Why pass legislation now which will make it harder for employers to sustain numbers of registered disabled in excess of their legal requirements?" Why make it harder for the smaller establishments to give useful employment to numbers of these unfortunate people? Many of the registered disabled find it easier to obtain employment in the service industries than in the great manufacturing industries in some parts of the country.

In many of the development and rural areas the only employment available in any volume for these people is in the service industries. In the North, Scotland, Wales, and the South-West of England, in particular, there are many large rural areas with very little manufacturing industry where the only employment available for disabled people on a big scale is in service industry.

For that reason, too, I plead with the Minister to consider this matter with sympathy. I beg her not to let technical difficulties inhibit her in making the legislation more humane. The approach of Treasury Ministers to the problems of similar categories of people like part-time workers was singularly heartless. But how much more heartless it would be if they were to adopt a similar approach towards the partially disabled. I beg the Government not to let such technical difficulties prevent them from doing the right thing.

The right thing to do in this case is to iron out the roughness of this legislation, which has been described by Ministers as having a sort of rough justice. I suggest that it has a lot of roughness and little justice. Let us iron out some of the roughness by including such a deserving category of people as this.

Mr. Ron Ledger: I listened to the speech of the hon. Member for Cheadle (Dr. Winstanley) yesterday. It was such a break to hear a speech made with sincerity and from a great deal of knowledge. I intervene only because I was given to understand this morning in discussions that I had with people in my constituency that part of his speech might be misunderstood.
I have the greatest sympathy with the case which the hon. Gentleman made. I am not saying that I would carry that sympathy too far, for a number of reasons, but the hon. Gentleman was very sincere in what he said. In referring to disabled people and their difficulties, he drew a conclusion drawn by a number of people, namely, that as a result of the Bill employers may say, "If I have to get rid of people, it will be the disabled who suffer first". The hon. Gentleman said that a number of employers made special conditions in employing disabled people and that this added weight to his

belief that if there were a surplus of labour these people would go first.
I checked this morning with a number of disabled people in my constituency, some of whom have special provision made for them and some who, despite their disability, do a normal job. I gathered that if the conclusion which the hon. Gentleman drew was the main reason for his Amendment he was drawing the wrong conclusion, because I firmly got the impression that employers who made special provision for disabled people certainly would not adopt such a heartless attitude to them.
The other far more important point is this. I gathered that when special provision had been made many of these people were at least as skilful, if not more skilful, than those who had no disability. Therefore, in the event of redundancy, there is no certainty that the disabled people would be made redundant. Even when special provision has not been made, the skills of disabled people are often greater. They know that this is their one chance. Care has been taken to ensure that they can do a job for which they are fitted, in view of their disability. Because they know the limits imposed on them, they apply themselves more to the job and become more skilful.
I do not want to take anything away from the speech of the hon. Member for Cheadle, but I am sure that he would agree that we want disabled people to know that we understand that, with their skills, they can often hold their own with people who are not disabled. I do not support the Amendment because I do not believe that it would necessarily be disabled people who would suffer from redundancy.

Dr. M. P. Winstanley: I am greatly obliged to the hon. Gentleman for his support of my case, limited though it is. What he says is very largely true. But it is also true that in many cases one has to take very strong action to get employers to employ disabled people. I have pleaded with managements to take on people who, to be frank, will not be very much use to them. Managements have done this. I accept that many disabled people do very good work. But he must also accept that there is a number, albeit perhaps a small number, of disabled people who do not do good


work. Let us not assume that because the number of people involved is quite small they do not matter. I should not have thought that that was the philosophy of hon. Members opposite. Surely they do matter.

Mr. Ledger: I am glad to have been able to give the hon. Gentleman a chance to clarify his position. I am certain that my right hon. and hon. Friends who introduced the Bill have this point very much in mind. If it is necessary, I am sure that the appropriate action will be taken, as it can be taken, under the Bill.

4.30 p.m.

Sir Charles Mott-Radclyffe: I listened carefully to the very able speech of the hon. Member for Cheadle (Dr. Winstanley) and to the speech of my hon. Friend the Member for Barry (Mr. Gower). I do not think that I have ever heard a stronger case, and I beg the Government not to treat this matter lightly.
There is an overriding argument for making the concessions requested. I can think of no reason on economic, social or humanitarian grounds for not making this concession. If there is one golden rule about the problem of disablement it is that hardly any two disabled people are exactly the same. They may suffer from the same disability, but in different degrees. What is certain is that we cannot generalise about the disabled. The problem is to find the right sort of work in the right sort of industry or occupation for a disabled man or woman in the light of his or her disability. This involves finding a number of round holes to fit a number of round pegs.
My experience in my constituency and elsewhere is that anyone who has had anything to do with the Ministry of Labour knows perfectly well that that Department goes to enormous trouble to find occupations for disabled people. The same goes for the various ex-Servicemen's organisations. They are in close touch with the Ministry of Labour all over the country. One knows of firms and individual employers who lean over backwards to employ a particularly hard luck disabled man or woman. On the other hand, there are firms and individual employers who take a little bit of persuading to do this because sometimes the employ-

ment of disabled people is what I might call only marginally economic.
Once the Selective Employment Tax is applied to the employer, whether it be a firm or an individual, of a disabled person, what up to now has been what I call marginally economic is marginally economic no longer in view of the 25s. a week which has to be paid. It becomes uneconomic. I think that the hon. Gentleman said that there are 200,000 disabled people in the service industries alone in respect of whom, unless the Government accept this series of Amendments, there will be no repayment. Quite a number of those people will be discharged. With the best will in the world, they must be. What will happen? They will be unemployed and they will receive full unemployment benefit.

4.30 p.m.

But it is not only that that matters. The point is that they will have nothing to do, and anyone who knows anything about the problem of the partially disabled knows that one of the great merits of finding a disabled man or woman a job is that it produces an occupation for them, it takes their minds off their disability.

Therefore, every man and woman who can no longer be employed, owing to S.E.T., because it is marginally uneconomic to employ him or her, will receive the full unemployment benefit. He or she will not have anything to do, and the Government will lose the 25s. a head per disabled unemployed. This does not seem to me, whether on economic, social or humanitarian grounds, to be very sound policy. In fact it is thoroughly unsound under all three headings.

I very much hope that the Government will see the strength of the argument of this group of Amendments moved from this side of the House.

Mr. Eric Lubbock: I wish to deal with two points raised this afternoon, one of them by the hon. Member for Barry (Mr. Gower), who said that he hoped that in her reply the hon. Lady the Parliamentary Secretary would not dwell on the technical difficulties. In his powerful speech last night, my bon. Friend the Member for Cheadle (Dr. Winstanley) demolished the arguments previously advanced by the Financial


Secretary concerning these technical difficulties. They do not exist. The existence of the Disabled Persons' Employment Register means that the employers would not even be required to submit any separate returns, for the amount of money to be paid in refund to be calculated. The returns already have to be made on a periodic basis.
The hon. Lady will no doubt confirm that this information is available in her Ministry. She shakes her head, but I have discussed this thoroughly with experts, who assure me that it is so, so I will not accept any technical arguments against the implementation of my hon. Friend's Amendment, whatever the hon. Lady may say.
I hope that no one on the Government side of the Committee will rely on the technical objects which were mentioned previously by the Financial Secretary. That would be an extremely poor argument. The hon. Member for Romford (Mr. Ledger) had a superficially better argument, but I point out to him—and this is the second reason why I rose—that according to the figures given by my hon. Friend yesterday evening there are 48,000 people unemployed from the Disabled Persons' Employment Register, out of a total of 650,000.
As the hon. Gentleman can sec with very little arithmetic, this is a very much higher percentage of the total than the national average. Therefore, if he says that he cannot support us on the Amendment because my hon. Friend failed to prove that the employment difficulties were greater for the disabled, I ask him to consider these figures before he finally makes up his mind on how to vote on the Amendment. I also ask him to consider the point that there are companies which employ only disabled persons and exist for that purpose, because they know that those persons will find it relatively difficult to get a job in an ordinary commercial firm.
The British Legion Attendants Company Ltd. was formed by the British Legion to give employment to ex-Service men who find it difficult to compete in the ordinary labour market. In spite of the tremendous shortage of labour, it is still found necessary by the ex-Service men's ori,anisations to provide this service for people who have done well for their

country. I am told by the chairman of the Orpington women's branch of the British Legion that the company employs 801 people. She writes:
…one does not have to be a mathematician to see how much this tax will affect the company. If we have to close the company what is to become of these people, who could not be absorbed elsewhere? If they were just pensioned off, this is not good for any man's self-respect "—
and, she rightly adds:
 and why should we have to? ".
The hon. Lady could not possibly have considered the effect of the S.E.T. on an organisation such as this company. If she takes time to reflect, she cannot help but accept the Amendment which was so ably moved by my hon. Friend yesterday evening.

Mr. F. J. Bellenger: Generally speaking, I support the Government on the Selective Employment Tax, but, as hon. Members on both sides of the Committee have pointed out, there are many anomalies. There are the classes of persons for whom hon. Members have pleaded that should be exempted from the Bill. As the hon. Member for Windsor (Sir C. Mott-Radclyffe) said, many ex-Service men are dependent for their work to a certain extent on charity, but they are also doing valuable work, and they will be left high and dry if the S.E.T. applies to the industries or employers engaging them.
I remember very well that after the First World War the King's Roll was set up especially to enable employers to get the benefit of being put on the list of contractors for public departments if they guaranteed to employ a certain percentage of people disabled as a result of the war. I should look askance if those people were particularly penalised, when so much public and charitable money has been spent on creating employment for those classes. In my constituency, there is a Remploy factory. I do not know whether it will be exempt. I do not suppose that it would be exempt as a charity, but Government money has been spent in large amounts in setting up these establishments all over the country, and, to say the least, it would be a bad policy to rob Peter to pay Paul if they were to come under the tax.
I well understand that my hon. Friend cannot give a general reply on the points


raised by the hon. Member for Barry (Mr. Gower) and the hon. Member for Orpington (Mr. Lubbock). The tax his been introduced to raise revenue and also, to use the Prime Minister's phrase yesterday, to "shake out" certain people from services to production. This legislation has been introduced very quickly, without perhaps, mature consideration, and it will, therefore, have to be considered again by the Treasury at some time in the future if we are to get a proper and fair balance between one class of employer and another. I hope that my hon. Friend can tell us today that, once the tax is working, the Government will look at these anomalies and at least exempt some classes, in the same way as the Chancellor of the Exchequer has done wholesale in the case of those bodies that can prove that they are charities or charitable organisations.
That is all I say to my hon. Friend. I do not expect her to accept the Amendment, but I make a plea for the various people to whom hon. Members have referred. Let us see that we temper our justice, as it were, with mercy. It would be unmerciful to put any class of disabled persons out of work merely because the Chancellor wants to raise more taxation, and it would deny the good work which has been done by successive Governments and by organisations such as the British Legion which extensively employ men who were disabled in doing their duty to their country in two world wars. I hope that my hon. Friend will give us a sympathetic reply.

Mr. Bernard Braine: I support the Amendment which has been moved by the hon. Member for Cheadle (Dr. Winstanley) and supported by several of my hon. Friends as well as by the right hon. Member for Bassetlaw (Mr. Bellenger) in a set of closely reasoned and compelling speeches.
It is disgraceful that responsibility for this tax on the disabled has been put upon the Minister of Labour. It runs completely counter to everything which his Department has tried to do ever since the passing of the Disabled Persons (Employment) Act, 1944. The Committee will recall that that Act had two purposes, to promote and facilitate the rehabilitation and training for employment of persons handicapped by injury, disease or

congenital deformity, and to enable such disabled persons to obtain employment or undertake work on their own account.
Over the years the Ministry has worked nobly in this task. It has established 17 rehabilitation centres. About 12,000 men and women pass through them every year. Their purpose, according to a Ministry handout,
 is not to give training—that may follow in a Government Training Centre or elsewhere—but to improve or restore the faith of men and women who pass through them in their ability to do a job of work, and once again to become useful members of the community.
But the final test is not that. The final test is in getting disabled men and women into jobs and keeping them there. This has meant, in the words of the Tomlinson Report which pioneered the disablement Acts, finding jobs which enable the disabled to secure employment on their merits and to keep it in competition with other workers. The task has never been easy. it has meant ceaseless endeavour by dedicated disablement resettlement officers. These officers have had a good deal of success, as many of us know from our constituency work, but they have also had some heartbreaking failures.
How can the Minister of Labour ever have accepted responsibility for this iniquitous Measure, which is bound to make more difficult the employment of a good many disabled persons and make impossible the placing of many others? The Minister himself, who is not present at the moment, is a kind and courageous man. He has the respect of this side of the Committee, and I know his qualities well, because he was my predecessor in South-East Essex. I refuse to believe that in his heart he accepts this betrayal of everything for which his Ministry has hitherto stood in relation to the disabled and handicapped.
It is worthwhile remembering just how vulnerable the disabled are. We have heard the figures-659,000 on the Disabled Persons' Employment Register, that is, one in 40 of the employed population, with 47,000 of them unemployed in February—perhaps fewer today. Those figures show that the registered disabled have a rate of unemployment four times greater than the national average, and this at a time of acute labour shortage.
But those figures, as the hon. Member for Cheadle pointed out last night, well


may also be an underestimate, because there are many disabled people not on the register. In this context, it is pertinent to ask why they are not on the register. Any disablement resettlement officer will tell the hon. Lady why. A good many will not register because they believe that it means recognition of their disability and, therefore, prejudice in finding a job.
4.45 p.m.
So far, there has been no sign from the Government of awareness of these difficulties, or, if they are aware, no sign that they care. I hope that the hon. Lady—I know that she cares—will dispel that impression. The Committee will recall that, when my hon. Friend the Member for Shipley (Mr. Hirst) sought, on the Report stage of the Finance Bill, virtually to exempt the blind from the tax, the Financial Secretary, in a most unhappy and, if I may say so, uncharacteristic speech for him, said that because employers had sympathy with the blind they would not discriminate against blind employees, and for full measure he added that, after all, not very many people were involved.
The hon. Member for Romford (Mr. Ledger) was quite right when he said that a good many blind and deaf persons have a highly developed sensibility in other ways. They develop special skills, and they are assets to their employers. But this is not always so. Acute difficulty is encountered by social welfare officers working with the D.R.O.s in placing deaf school-leavers, for example, especially those with limited educational attainment. Unhappily, training facilities for boys are very limited, and they do not exist at all for girls.
It is also extremely difficult to place those whose mobility is restricted or who suffer from epilepsy. Yet we all know that for such people having a job is absolutely vital to their well-being. It is part of the business of enabling them to overcome their disability, to come to terms with life. It is often forgotten that the physically disabled suffer physical pain and discomfort, and are invariably at a serious disadvantage socially and psychologically. The effects of disability upon personality and upon educational and emotional development are immeasureable.
What will happen if small employers are forced to reduce their staffs? This is the purpose of the Bill. Employers in service industries are being required to reduce their staffs. Inevitably, in many cases it will be the disabled, the awkward, the slower worker, and, in the case of the epileptic, the man who occasionally causes difficulty, who will go first.

Dr. Winstanley: I entirely endorse the list which the hon. Gentleman has given, but will he add to it that disabled persons in employment have a bad sick absence record? They are liable to be absent from work fairly frequently.

Mr. Braine: I entirely agree. The hon. Gentleman speaks from direct experience, but I know that to be so. Let me take the matter further. What are the chances of a disabled person dislodged from employment by this means of getting another job? A disabled person has a much reduced choice of job, anyway. He encounters difficulties at every turn. He cannot travel very far. He is limited in the work he can do. This is particularly true of the deaf, for whom there are, obviously, problems of communication. He gets no tax relief by way of compensation.
It is not just a question of disabled people being the first to be displaced by the tax. Having been displaced, they are far less able than ordinary workers to find alternative employment. They will be consigned simply to the scrap-heap. It is inconceivable that a Labour Government should have brought in a Measure of this kind.
On the other hand, exemption from the tax may make all the difference when an employer comes to decide whether to retain a disabled worker. If the Treasury Ministers do not understand that, I am sure that the Minister of Labour does. Indeed, the present Minister has gone out of his way to thank employers for the co-operation that he receives. He made a number of speeches on the subject last year. But, in these circumstances, will employers go on co-operating?
We ought to try to answer the question realistically. Why should employers in service industries continue to retain disabled workers in this situation? The Government tell us that one reason for the tax is to move workers into manufacturing. To use the Prime Minister's


elegant phrase, there is to be a shake-out in jobs. Why should employers in the service industries be taxed on workers who, in some cases, may not be doing the work of a fully healthy worker because of some disability, when the Government are subsidising manufacturing employers to retain their workers? There is no economic sense in this, and I have demonstrated that there is no social sense in it, either.
We on this side, and I am perfectly certain that in their hearts hon. Gentlemen opposite as well, are deeply concerned about the social consequences. The Committee is entitled to know whether the Minister consulted his Department right the way down to the disablement resettlement officers about this shabby proposal. What was the considered view of his advisers who, for 20 years, have been engaged in the humanitarian work of trying to help the disabled to fit into employment?
When the Parliamentary Secretary replies, may I ask her if she will tell us whether the Minister's National Advisory Committee for the Disabled was consulted, and the country-wide system of district committees as well? Did they express any view once a decision was taken? Was any disablement resettlement officer consulted? I think that I know what the answers will be, but the Committee is entitled to hear the Parliamentary Secretary reply on this subject.
It has been said that the tax puts a premium on inefficiency, on the hoarding of labour and that it is a positive disincentive to economy in manufacturing. That is true. It has been said that the tax is confusing and contradictory in the sense that it will be inflationary in manufacturing industry at a time when the rest of the Government's measures are supposed to have a disinflationary effect. That, also, is true. In its social consequences, the tax will be wholly bad, and one of its more pernicious effects will be to penalise the disabled, the elderly and the wife who works part time to keep together a family that may have lost the father or where the husband is sick or completely disabled. All these will be disadvantaged, while the premium is to be paid in respect of workers in manufacturing who so far have failed to re-

spond to the Prime Minister's woolly exhortations to raise production.
So it is that the first casualties of Socialist failure to inspire the nation to greater efforts are the weakest elements in our labour force. Thus, the tax reverses in deed and in spirit everything that successive Governments have tried to do for the disabled. I myself would support discrimination in favour of the disabled, as I have always said. But we are not asking for that. The hon. Member for Cheadle made it plain that we are asking for far less. By definition, the disabled worker starts off with an inbuilt disadvantage. All that we ask here is that he shall not be disadvantaged further by this clumsy and singularly unselective tax.
Here is one case where the excuse of administrative difficulty cannot be made. Most of the disabled can be identified, because they are already registered. They can remain on the register only if medical evidence is given that they are disabled. In the case of part-time workers, the Financial Secretary said—and I give him credit for it—that he was prepared to look at the matter again. The case for doing so on this Amendment is even stronger. I beg the Government to relent, to reverse their policy, and do so with dispatch.

Dame Irene Ward: I wish to reinforce very strongly what my hon. Friend the Member for Essex, South-East (Mr. Braine) has just said and, first of all, I want to follow up one important point.
I, too, would like to know from the hon. Lady whether the National Advisory Committee and the district and area disablement resettlement officers have been consulted, and I have a particular reason for asking that question. I would not have raised the matter had it not been for the speech of my hon. Friend, but he set off a spark in me, because I happen to have fought and won a battle with the hon. Lady affecting women.
My hon. Friend mentioned the National Advisory Committee for the Disabled. We also have a Women's Consultative Committee which advises the Minister of Labour, and it is only an advisory committee. There was a meeting of that committee when the Selective Employment Tax was announced. Unfortunately, I was unable to attend the meeting, but


I was horrified to hear that certain of my friends on the Committee had tried to raise the matter with the idea of finding out what advice the Committee wished to tender for consideration by the Minister, only to be slapped down on the understanding that another Department was dealing, with it.
I went into battle over that, because I do not sit on consultative committees for the purpose of being overriden when the occasion for using the advice of the committeee arises. I asked the Parliamentary Secretary, who chairs the Committee—and I realise that I am being a little unfair, because she had just taken over the chair at the time—whether we could have a special meeting. The hon. Lady's reply was against a special meeting. Being a rather naughty and long-experienced Member of the House, I put down a Parliamentary Question immediately, and that won the battle.
The meeting will be held next week, and the Minister will be able to consider the advice. It may be that the Committee will support the Minister and the Government. I do not know. But to wipe out the opportunity of a consultative committee giving advice in a time of crisis and when part-time workers, women worker; and the disabled are involved, does not strike me as straight, honest dealing.
I am glad that my hon. Friend has raised the problem of the disabled. If the National Advisory Committee has not been consulted, I hope that the hon. Lady will hurriedly take steps to call it together, because there is still time to do something about this before the Report stage, and here is the field wide open. I may say to the hon. Lady and to the Government that I do not appreciate being double-crossed out of my democratic rights. I like to have every opportunity available.
I will not go over again the points which have been admirably expressed in support of the elimination of the disabled from the Selective Employment Tax. They have been more than adequately made.
5.0 p.m.
I listened to the hon. Member for Romford (Mr. Ledger) who talked about this matter from the Government side. What always happens when a case is

argued by those who support our views on the imposition of the Selective Employment Tax in respect of part-time and disabled workers, is that the Financial Secretary and the Chief Secretary deal with the case in general terms. They never argue that it is the right of this House to protect the individual, and not only in general terms the community.
The Amendment has been moved in support of the rights of individuals. The Prime Minister talked about a shakeout. I thought that it was a shake-out, and not a shake-up, but, whether it was a shake-up or a shake-out, the object of this tax is to transfer workers from service industries to manufacturing industries. But this is a lot of nonsense, because if the Government can introduce a Bill making charitable organisations liable to the tax, that must be absolutely batty. Fortunately they were forced out of that position very quickly.
The disabled have received a great deal of attention from the Ministry of Labour. The Ministry has done a lot of hard work to get them employment and to keep them employed. Nobody in his senses can believe that it is possible to bring the disabled worker into the open market. It is absolute nonsense. I am a very suspicious person, and I can see the whole build-up. The hon. Lady, whom we all admire, is put on the Government Front Bench to answer the debate. It is not the Financial Secretary, it is not the Chief Secretary, it is the hon. Lady who is left to answer the arguments, and I think that it is wrong of the Government to put this responsibility on her in view of her Department's past history.
One can argue one way or the other on the general question of the disabled. One can talk about the arrangements which have been made for special cases, about the attempts which have been made to help them, and about the work which has been done by the hon. Lady's Department, but the point remains that if this House agrees to this tax on the disabled the psychological effect will be to make people say, "What a Parliament. What a democratic approach to the disabled. They could not even in their hearts find it right to make a special concession for those whom they have always argued they were so interested in." It is


the overall psychological approach which will be so damaging to the disabled.
Many of them know only too well the efforts which have been made by employers to help them. Some employers are much more ready than others to respond to those who need help, but, taking them as a whole, people are out to do what they can to help those who have had an unfortunate deal in life. I am glad to say that one of the developments in our national life is that people are becoming more conscious of the need to help those who have had a bad deal in life. It will be a terrible thing if the idea grows that this Committee is not prepared to help the disabled who cannot possibly fall into the category of workers which the Bill seeks to transfer from service to manufacturing industry.
Surely even this Government, at this time, do not need to tax the disabled. Disabled people cannot be regarded as part of the inflationary pressure which has built up in this country. Wherever the inflationary pressure may have come from it cannot have come from the employment of the disabled. Are the Government proposing to send out word from this House of Commons, the central part of our democratic system, that they are going to tax the disabled in this way?

Mr. Braine: The majority.

Dame Irene Ward: I agree that it will be a majority, because many people will vote against this proposal, but the fact remains that it will have this bad psychological effect. People do not always examine the Division lists, nor do they always read the Press, nor listen to wireless or television broadcasts. This proposal cannot be in the interests of building up the morale of the disabled. Surely no one wants to destroy that? They have enough to cope with already.
With all the power at my command, I beg the hon. Lady to repudiate this proposal. Somebody said that she could not give a pledge today. I am not taken in by Ministers saying that they will be able to do something in the future. There is no need to deal with this in the future. It can be dealt with today and I hope that the hon. Lady will do so quite firmly. The Deputy Prime Minister was "in-ing" and "out-ing" yesterday. I am sure

that the hon. Lady would "out" in a good cause. If she "outed" in this case —I realise that it is not her decision, it is the Government's—she would win a great victory, and I am sure nothing would give her greater pleasure than winning a great victory for the disabled of this country.

Mr. Harold Finch: I spoke on this problem of the disabled during our discussions on the Finance Bill. I want for a few moments to plead with my right hon. and hon. Friends on the Front Bench to make some concession in respect of disabled people. I support the Government's general policy, and I support their prices and incomes policy, but I feel rather embarrassed sitting here listening to right hon. and hon. Gentlemen opposite speaking on a subject which I know is of great importance to many disabled men and women.
Employers in service industries will have to pay 25s. a week for every man in their employment. This applies to both fit and disabled people. If we strike the slightest recession—and I want to look at this as optimistically as I can—I do not say that employers will get rid of all disabled persons merely because they have to pay 25s. per week for them, but it is likely that the disabled will be the first to be dismissed. Many disabled people are employed in sedentary jobs. Many are crippled, some are ex-Service men, and some, having come out of the mining industry, suffer from pneumoconiosis and have to gasp for breath and can hardly walk.
I know that some employers employ more than 3 per cent. of disabled people. I have pleaded with them to take on additional disabled people, men who have been unemployed for years, because it is impossible to gauge the happiness which a disabled man finds when at last he has a job to do. I have been to employers and asked them to take on perhaps just one more disabled man. An employer often says, "We are employing 3 per cent. already", and we say, "Take one more". He may then take another one. Now we are imposing on such an employer the penalty of paying 25s. a week for each of these men.
I support the main object of this legislation, but I cannot support this burden being placed on the disabled. These men


and women cannot properly help themselves. An able man who becomes redundant can find a job somewhere else, but once a disabled man is out of work he finds it very difficult to obtain another job. do not follow this part of the Government's policy. If a man is unemployed for a long time he ceases to be eligible for unemployment benefit. I believe that the benefit expires after 17 or 19 months, at most. At the end of that period the only help he can obtain is from National Assistance.
Many disabled men who have spent a lifetime in the mining industry and who find themselves unemployed as a result of this provision will have to resort to National Assistance. I do not think that my right hon. Friends intended this, but that is what their policy will do. I do not understand the attitude of the Ministry of Labour. Its resettlement officers find employment for disabled people. They are paid for it, and they have done their job very efficiently. We can now close the door on the service industries, because these resettlement officers will not be able to get any help from them.
Why is it necessary to bring in the disabled? My right hon. Friends say that difficulty arises in establishing the number of people who will have to pay contributions. It seems a simple matter to me; it is for every employer to tell the Ministry the number of disabled he is employing. We need not have all these complications concerning pensions and contributions. The employer merely has to state that he is employing so many disabled people, and supply their names, addresses and the amounts of their contributions. His return can always be checked. I cannot see how any difficulty can be caused.
The State will not derive any financial benefit from this provision, because the people who become unemployed will go on to National Assistance and that will be a burden on the Exchequer. The Coal Board has done a good job for the disabled, but it cannot do more. These men are not mobile. They may be able to obtain work in manufacturing industries but I still do not see why the door to the service industries should be closed to them.
In my opinion the Ministry is frustrating the work of its own officers

because it is going to create a situation in which there will be little point in rehabilitation and training for the disabled. I am embarrassed with the Ministry in this respect. Over the last 18 months or two years we have made a drive to obtain more work for the disabled, and it distresses me to have to stand here this evening and plead with my own Government on their behalf. I hope that the Ministry will reconsider this proposal, because it is more important to me than all the other aspects of the policy behind the Bill.
I am fighting for men and women who cannot help themselves. Many of these people have given a life's work to industry, and they are going to find themselves unemployed, with the door closed to further employment, by the action of the Ministry of Labour.

5.15 p.m.

Captain Walter Elliot: I know that all my hon. Friends find themselves fully in agreement with the hon. Member for Bedwellty (Mr. Finch) who asks what the point of this provision is. The trouble in the first place is that the economic and financial policies of the Government are in such a state of indescribable confusion that it is extraordinarily difficult to decide what the point of any impost is. The task is made even more difficult, because the emphasis changes from week to week.
Three reasons have been put forward for the imposition of the Selective Employment Tax. First, it is said to be revenue-raising; secondly, it is said to have a deflationary impact, and, thirdly, it is supposed to aid the redeployment of labour. Let us examine those three reasons. We have heard that over 200,000 disabled people are employed in the service industries. The financial cost of relieving them of this burden would be very small. It would be particularly small if we take into account the Prime Minister's statement of yesterday, when he said that he was clawing in another £500 million from the staggering populace. I cannot see any justification for imposing this tax on the disabled simply to raise revenue.
What about its deflationary effect? As the right hon. Member for Bassetlaw (Mr. Bellenger) said, vast sums of public money have been spent in setting up


retraining establishments for the disabled, in order to fit them for new jobs. If we are blunt and honest in using the expression "deflation" we have to admit that we are envisaging another 400,000 unemployed. After all the money that we have spent in retraining the disabled we do not want to see them unemployed. That is ruled out as a reason.
The third reason, concerning the redeployment of labour, is inextricably bound up with retraining. However willing the disabled are, and however good, it is difficult to retrain them. We do not want to redeploy these men and women into other jobs, and have to waste a lot of time in retraining them. Therefore, that reason also seems to be out. We have been told that the administrative problem involved in relieving them from this burden would be very small, and the Government cannot rely on that argument.
We have been very disappointed with the lack of support from the back benches opposite. Everyone admits that the mainspring of the Socialist Party in the past has been its streak of idealism, in seeking to help the blind, the lame and the halt. We are not putting forward these Amendments for any party purpose. We have heard hon. Members opposite speak in support of our arguments, but we have received no support from them in the Lobby. Surely, in Committee, nothing is more calculated to spur a Government than a healthy defeat on some minor point. It could not bring them down, so surely we could expect some support from the back benches opposite on this issue.
I am slightly encouraged to see that, apparently, the hon. Lady the Parliamentary Secretary to the Ministry of Labour is to reply. The Chief Secretary and the Financial Secretary must be tired out. I do not know where the Chief Secretary is today: I hope that he is away having a rest, because in the last few days he has put forward the most extraordinary arguments. When he wound up the guillotine debate, the thesis he propounded was that the more complicated and controversial a Measure was, the more important it was to stifle discussion. When he wound up the debate on concessions for the blind, he proved entirely to his own satisfaction that in

obtaining employment it is a great advantage to be blind.
The hon. Member for Romford (Mr. Ledger) came near to arguing that to be disabled might not be a disadvantage. We should reject that argument completely. The disabled are only a certain percentage efficient—perhaps 50 or 70 per cent. They have grave disabilities, so that I hope that that argument will not be put forward by the hon. Lady.

Mr. Ledger: Most hon. Members here did not understand that from what I said. I said that so many who are disabled overcome their disability and acquire skills equal to those of people who are not disabled. This was my point, that they would not automatically lose a job because they were disabled, because their skills might be so great. I hope that the interpretation which the hon. and gallant Member made was for his own purposes and that he is the only one who would make it.

Captain Elliot: I take the hon. Member's point, that, because these people are disabled, there are no grounds for a concession. That was the argument of the Chief Secretary for the blind. I hope that it will be rejected.

Mr. Ted Leadbitter: Hon. Members opposite have talked a great deal about their concern for the disabled, which is admirable. I do not doubt that they and hon. Members on this side are greatly alarmed about the effects of the Selective Employment Tax on the disabled. I do not doubt the genuineness of what hon. Members have said, but when we try to translate expressions of concern in terms of political performance hon. Members opposite have a dismal and miserable record.
I can remember pleading for concessionary fares for old people, the disabled and the blind in my maiden speech in 1964. I recollected then that over a period of years hon. Members opposite had opposed such a Measure to help the kind of people for whom we are pleading now—

Mr. Braine: Would the hon. Gentleman also recollect that the same question has been put to the present Government and that they, too, have declined?

Mr. Leadbitter: The first Bill with which I was happy to be associated was that which provided for concessionary fares. Happily, this is being operated now by many authorities—

Mr. Braine: Not for the old people in my constituency.

Mr. Leadbitter: The hon. Member represents a constituency which I cannot judge. He is a Conservative Member, and I challenge him to show that he has ever pressed his local authority to implement the Travel Concessions Act.

Mr. Braine: rose—

Mr. Leadbitter: The point I want to develop—

Mr. Braine: The hon. Gentleman has just made an assertion that, in a certain matter, I have not pressed the interests of my constituency. I made an earlier intervention because I have been in correspondence with the present Government and have received a dusty answer.

Mr. Leadbitter: My point simply is that in this matter, concerning disabled people, hon. Members opposite have a very unhappy record. However, I am not making a case that any hon. Member is less concerned than I am about disabled people. I respect their views. It is not a good test to have recriminations about political performance—[Hon. MEMBERS: "Oh"] It is not a good test. The test is whether we are concerned that relief should be given to this section of the community, to whom these matters are of grave importance.
I am sometimes concerned to see political opportunism in a debate on an attempt to reform our tax legislation, which is bound to have anomalies. I would be the first to say that the Selective Employment Tax is half-baked, half-thought-out and hurriedly introduced and that it might be wiser if my Front Bench bore in mind opinions expressed in this House rather more than the opinions given by their advisers. I am satisfied that every hon. Member returning to his or her constituency sees there the social consequences of legislation. This is more frequent than the Ministry's advisers think.
I am alarmed that there are so many anomalies in this half-baked and half-

thought-out Measure and that we cannot yet get a nod from the Front Bench to signify that the Government will think of introducing reliefs where they are most needed. I will not go so far as to say that the S.E.T. is not necessary. It is very necessary. However, it would have been more effective if it had been considered in the coming year and then introduced, when all the consultations with and advice from those concerned with communities like the disabled might have been far more helpful in producing a tax with the degree of selectivity which the Title of the Bill implies.
5.30 p.m.
I hope that the Government will accept that on both sides of the Committee there is genuine concern—in my case it is anger—that S.E.T. is to be applied in cases where it will do harm. I go so far as to say that my anger about this form of tax is such that unless I can be otherwise persuaded I will feel disinclined to support the Government in this matter.
The hon. Lady the Member for Tyne-mouth (Dame Irene Ward) has talked about courage. I would be the last person to minimise the courage which she has displayed in Parliament over the years, even if a large part of it might come under the heading of stubbornness. I must make my case as a back-bench Labour hon. Member and that is why I say that unless I receive a nod of approval from a member of the Government to convince me that my remarks are being heeded, I will feel disinclined to support the Government on this issue.
All hon. Members must examine their conscience in whichever part of the Committee they sit. Having done so, I have some simple questions to put to the Government. They are simple because I have removed them from the area of political recrimination. They are questions which have to do with ordinary people and I trust that I will be given an ordinary and straightforward reply. Do the Government really believe that they will help the disabled by the imposition of S.E.T.? If so, will they explain in simple terms to what extent it will be helpful? Is S.E.T. likely to be harmful to the disabled? If so, to what extent will it be harmful and on what advice have they determined the degree of harmfulness?
Do the Government genuinely believe that disabled people employed in industries which may be affected by the announced shake-up will not suffer; that redundancy will not occur to the disabled people seeking employment in the service and distributive trades? To what extent will they suffer in this way, and will they have to seek employment in other trades? If so, do the Government believe that they will be considered for employment? To what extent will this tax on the disabled produce any sort of revenue return? Is it possible, considering the technicalities involved in collecting S.E.T. for the Government to think in terms of introducing some reliefs or creating allowances for the disabled employed in the service industries?
The Government have an opportunity tonight to say to at least one hon. Member on the Labour side—although I am not the only one on these benches who feels deeply concerned about this—that they are willing to examine the imposition of S.E.T. again so that I and my hon. Friends who feel the way I do may feel able to support the Government, remembering that an expression of sympathy from the Government Front Bench would show that the Government share the anxiety that has been expressed on both sides of the Committee.
I wish to make it clear that I feel equally strongly that the Ministers concerned have not looked at this matter as clearly as have hon. Members who have criticised it. Nevertheless, I am dreadfully concerned about a process that has been and is going on in government and which is worrying back benchers on both sides of the Committee. It concerns the power and influence of Parliament. Various arguments may be adduced from one side of the Committee or the other, but they are being lost because of the weakening power of the House of Commons.
Having stated that the Ministers responsible have, I am sure, shown concern about the problem of the disabled, I would like to know to what extent their minds have been preconditioned by the advice given to them by people in other Departments. If that has happened, it is time that the Departments concerned—the Treasury, the

Ministry of Labour and any individual or individuals who have sought to advise in those Departments—were put in their proper place, because it is only after a brief has been written that the argument starts.
I hope that before the Division bell rings a member of the Government Front Bench will tell me that I have reason not to feel disinclined to support the Government on this issue.

Sir Tatton Brinton: I am in deep agreement with the hon. Member for The Hartlepools (Mr. Leadbitter). I only regret that he felt it necessary to begin his speech with a great deal of political recrimination, which he rebuked in other people although he might have applied it to himself. However, the remainder of his remarks were delivered with great conviction and I hope that his words will carry some weight with the Government. So far everything that we have said seems to have fallen on deaf ears.
I have listened to many speeches on this subject from hon. Members on both sides of the Committee and have been convinced, as any humane and logical person must be, that the issue we are discussing should be the subject of exemption from Selective Employment Tax. How can anybody justify taxing the employment of disabled people?
I do not wish to spin out the debate and I will, therefore, make only two points. First, it is precisely in those services which bear the tax that it is most difficult to employ disabled people. It is easier to find places for them in manufacturing because manufacturing units tend to be larger than distributive ones and, where dozens or hundreds of people are employed, it is obviously easier to find round holes for round pegs, as my hon. Friend the Member for Windsor (Sir C. Mott-Radcliffe) pointed out. The Government are putting a tax on those enterprises which find it more difficult to employ disabled people, namely, the service industries.
Secondly, what is the administrative difficulty about accepting the suggestion we have made? In the amazing encumbrances of the Bill it has been decided by the authors that those who are to receive the premium must first pay


the tax and claim their money back later. Why cannot any employer of any kind, whether in a service or manufacturing industry, also make a claim on one or another of the multifarious Ministries which are to administer the payments—making his claim in the same way as a qualifying manufacturer will make his claim?
The qualifying manufacturer has to establish a good deal of evidence to back up his claim. He must prove that more than 50 per cent. of his people are manufacturing and that he is on one side of the street and not on the other. He has to show how many of his people are filling in forms for the Government, and how many are actually making goods. How much more difficult would it be for the Government to enable the service industries to recover the tax by making claims in respect of the disabled people they employ? Could there be any difficulty the Government could not overcome?
I submit that where it is a matter of extracting large quantities of tax from the public, even at great difficulty, the Government can always find a way, but that when it is a question of forgoing a relatively small sum for a humane object we are told that administrative difficulties will not permit it. I hope that we shall not have that argument thrown at us again now, particularly in respect of such a humane object as we have in mind.

The Parliamentary Secretary to the Ministry of Labour (Mrs. Shirley Williams): In the course of this debate the whole argument has moved from a position marking the real concern of hon. Members—and there is real concern on both sides—to one that has become to a large extent distorted. I will state the facts as quickly as I can, then look at the incidence of the tax, and then remind hon. Members about one or two things already said in the debate which seem to have been forgotten.
First and foremost, this tax has been represented by a number of hon. Members on both sides as a tax on the disabled, but they might call it a premium for the disabled, because both statements are true. Let us look at the general facts. The Selective Employment Tax is, as my right hon. Friend the Chancellor of the Exchequer has pointed out more than

once, basically a tax intended to balance up the general level of taxation on the service industries vis-à-vis the general level of taxation in the manufacturing industries with, in the middle, a neutral section upon which refund is payable.
There are in the manufacturing section of industry some 300,000 disabled workers, on every one of whom the premium will be paid. If I may say so, at an earlier stage of our debate there was a long discussion in which hon. Members opposite perfectly legitimately argued that the premium could lead to labour hoarding, though I do not think that I have heard one of them argue that the premium would mean that in certain cases manufacturers would hold to their disabled labour, which must be the case if the argument is that the premium is an incentive to hoarding labour in manufacturing.
A further 100,000 disabled persons fall into the refund category. The sum of money payable on them will therefore be neutral, so we trust that their employment will not be affected. Finally, approximately 200,000 disabled are in the service sector. They are largely employed by firms which take them under the quota system. Under that system, which arose from the Disabled Persons (Employment) Act, 1944, they cannot be dismissed "without good cause". That means, quite straightforwardly, that there is a major barrier in the way of the very thing about which many hon. Members on both sides have, with due sincerity and real concern, worried themselves.
The hon. Member for Orpington (Mr. Lubbock), for instance, referred to British Legion car park attendants, but British Legion car park attendants, like all car park attendants in that group, and like all electric lift attendants in that group, are in employments that are listed as being open only to the disabled, so that no one not disabled can hold a job in those sectors. That means that if anyone loses his job in that sector, another disabled person will have to be employed. That is the case there—

Mr. Lubbock: Some people will do without attendants at their car parks—that is what will happen.

Mrs. Williams: This occupation is listed as limited to those who are disabled.

Dr. Winstanley: I am sure that the hon. Lady is aware that the description "car park attendant" is misleading. It is merely the name given to a company operated by the British Legion which supplies employment to all sorts of occupations. If one looks it up, one finds that many of them do other things, and to the cost of hiring them out to other commercial undertakings will now be added the Selective Employment Tax.

5.45 p.m.

Mrs. Williams: I do not deny the hon. Gentleman's argument, but merely say that it is not the case in this type of employment that disabled people will be displaced and other persons taken on. It is my duty to try to answer on the basis of fact. I will come later to the general concern that all hon. Members rightly feel on the subject.
Consequently, two-thirds of the disabled fall within the premium or refund categories. Half of the disabled will have refund paid for them, and one-third will not, but, of those, some come under quota, and therefore cannot, under the 1944 Act, be dismissed without good cause. These are the facts of the matter.
My right hon. Friend the Member for Bassetlaw (Mr. Bellenger) referred with deep feeling to those groups which largely concern themselves with providing sheltered work. Again, to the best of the knowledge of my Department, Remploy will come within the premium category, which means that it will be easier, and not more difficult, for it to carry on and reinforce its excellent work. Local authority workshops will be covered by the repayment provisions of Clause 4. And workshops run by voluntary bodies are almost all in the manufacturing sector and for the most part are also charities.
I will not deny that hon. Members on both sides have a very real concern for those whom this Measure might affect—if there were one person it would be too many—but we must get the argument in proportion, and recognise that a large part of the Opposition's case under the general head of a "tax on the disabled "is, if I may say so, intentionally or not, a highly distorted way in which to approach the subject, and does not help anyone.
I turn to the second point. There are certain administrative difficulties, but I make it clear that administrative difficul-

ties should never be allowed to stay in the way of something necessary as well as right. We shall argue in a moment whether or not this is necessary. We do not yet know. Let us look at the difficulties to be overcome. During the Committee stage of the Finance Bill the hon. Member for Cheadle (Dr. Winstanley), to whose real knowledge of and concern with this subject I wish to pay tribute, said about some employers—and he may or may not have been right about this; it is difficult to judge:
 They evade the Act by seeking to get on to the register many people whose disablements are more imaginary than real. There is the type of employer, who, to bring the total number of disabled persons up to the appropriate figure, will seek to get people, probably a mild diabetic, who have not been substantially disabled, to go on to the register so as to keep his figures up."—[OFFICIAL REPORT, 29th June, 1966; Vol. 730, c. 1866.]
That may occur in some cases. I am sure that we will agree that in most cases it does not, but it points to the difficulty, and it is a real difficulty.
I believe that the hon. Gentleman will agree that it is right that the terms and conditions for being on the disabled register should be generously expressed, and so they are—as he will know, because he is an expert in this field. One of these terms covers anyone who, by reason of disablement, may find it difficult to get new employment in less than 12 months. This is as generous a provision as exists anywhere else in the world, and it is probably more generous. It takes care, among others, of the short-term disabled who may, as we hope they will, later return to full health.
But the hon. Member will recognise that the terms and conditions of the disablement register, expressed broadly, as they are so expressed, as to make available the services of the Ministry of Labour to as many people as may benefit are, by that very token, very widely expressed so as to try to give reality to the disabled, of whom he knows there are many thousands, who are not on the register. As the hon. Gentleman pointed out during the Committee stage of the Finance Bill, there are some on the register who are certainly less disabled than others who are not on the register. So the first difficulty is that the register itself is a bad guide to the whole of the disabled community. It is a guide to


some, including some very severely disabled, but it excludes many who are disabled, and may include some who are more lightly disabled than others outside it. This is a genuine difficulty for anyone on either side of the Committee who wishes to be as fair as possible.
There is the further administrative difficulty constituted by firms with fewer than 20 employees who do not have a quota. Most of those firms in the service industries—I stress the service industries —under the Bill would make no returns whatever of employment or establishment and would put in no claims for repayments. So immediately there would be a great many firms in this small group of whom we have no clear record as to whom they employ because they have no record of numbers of disabled whom they employ.
If it is necessary to do this, it must be done. Now I come to the third part of my argument. Having argued the difficulties, the Government are reluctant to bring in this machinery unless it is necessary. My hon. Friends the Members for The Hartlepools (Mr. Leadbitter) and Bedwellty (Mr. Finch) have done a great deal in the field of disablement. They are both worried about the effect on the disabled, but I point out to them that on Second Reading of the Finance Bill, in Committee on the Finance Bill, and again in Committee on this Bill, the Government have pointed out, not once or twice but on a number of occasions, that, should there be any sign of it being necessary, they would be prepared to undertake this quite difficult administrative action—and so indeed they should.
I shall not listen—I do not think it would be right to listen—to the siren voices, however attractive, from the other side which ask me and my hon. Friends to resign on hypotheses. If these hypotheses are correct and there is a savage effect on the disabled, of course the Government would do something about it, but I point out that under this Government the proportion of disabled unemployed is lower than it has ever been since 1960. Not only is it the lowest, but it is 25 per cent. lower than it was in the final full year of Conservative Government. This Government have embarked on four new industrial rehabilitation units which are now due to be built. Those who are knowledgeable on the subject of disable-

ment know that the courses offered in those units and the work of disablement resettlement officers are to a great extent directed to where vacancies aries.
This tax is not a tax on the disabled. It is a tax which admittedly has an effect on the disabled in the services sector, but it is a tax on the services. Arrangements exist to make sure that disabled persons who come forward for resettlement shall be directed towards and trained for places which are available for their employment. The premium is available to all in manufacturing industry, which is half, and the refund is available for a further sixth, while Remploy and the like attract premium or refund. In consequence, while fully recognising the full concern which is felt and recognising the strong arguments put forward, I say that they are arguments which would carry a great deal more legitimacy if they were arguments about an effect and not—as they are—about an hypothesis which I believe cannot be sustained for the reasons I have pointed out.
If there should be evidence of a sharp effect on the disabled, of course we shall have to act despite the administrative difficulties, but if there is no reason to act, there is no reason to embark on a course which presents so many administrative difficulties.

Mr. Braine: The hon. Lady is resting her case on facts. I am sure that she would not wish to shelter behind the fact that the number of disabled has fallen steadily and sharply through the years. Would she not acknowledge that this is almost entirely due to the disappearance from the labour market of men who served in the First Great War and of some of the disabled from the Second Great War?

Mrs. Williams: Of course the hon. Member is right. That is why he must play fair with me, and he is generous with both sides of the Committee. It is fair to point out that this is a percentage figure. Had I given a complete, absolute figure it would be misleading. The percentage is lower on an admittedly lower total, but the absolute figures would have shown a dramatic fall which would not be fair.

Mr. Finch: Why is it necessary at all to bring in the disabled? What purpose


is it serving? It is not serving any purpose. Perhaps it is not appropriate for me to put this question to my hon. Friend and it should be put to the Exchequer, but I cannot see what the point of it is as it does not serve any purpose.

Mrs. Williams: My hon. Friend knows a great deal about the training of the disabled. He is asking why it should be necessary in any way to affect disabled people in the employment sector? I point out that the tax is a tax on services. It is a tax which gives a premium to manufacturing. He will know that there is no attempt to single out the disabled, but the tax falls on those disabled in the service industries. They are treated like everyone else. I pointed out the reasons why it is very difficult to exempt this group in the community. They are not definable from the point of view of National Insurance, and the register presents difficulties, but I assure my hon. Friend that those difficulties must be overcome if it is necessary, although the Government rightly say that it is not necessary to do so and if there is not an increase in the number of those unemployed among the disabled.

Mr. Leslie Spriggs: My hon. Friend says that disabled people are not definable, but surely medical evidence provided by the medical profession would make them definable?

Mrs. Williams: I am not for a moment trying to suggest that the disabled cannot be defined. All I am saying is that the machinery which exists to define them is machinery which would have to be established and which it would be relatively complicated to establish. If it has to be done, it will be done, but if it does not have to be done and the Government argue that two-thirds of the disabled will not suffer through the tax but will gain from it, it is beside the point to establish the machinery.
There is no closure on this debate, and hon. Members who wish to speak later can do so, but I have argued it several times and hon. Members must allow me to finish my speech. If they had given me an opportunity, I would have finished it a few minutes ago. I sum up by saying once again that those in the sheltered workshops will benefit from either a

premium or a refund, local authority workshops will benefit from the refund, and two-thirds of the disabled come within the premium or the refund category, but, should it be necessary, the Government have made clear on many occasions that action will be taken.

Miss Mervyn Pike: I apologise to the Committee that my voice is rather weak as I seem to have been rendered almost speechless by the events and announcements of yesterday, but I will do my best. In any case, I do not wish to detain the Committee for very long because many of the arguments have been put very sincerely and thoroughly. I do not want to go over them again, but I wish to comment on what the hon. Lady said.
She rested all her case, if I understood it rightly, on the fact that this tax is not a tax against the disabled. That, of course, we accept. It is not a tax against the disabled. Although we brought out in all our speeches and arguments the fact that the tax will hurt a large section of the disabled, we accept that it was not primarily a tax against the disabled. Of course, those in the manufacturing industries will have the premium and they are on all-fours with able-bodied workers. People in the category in which there is a refund are on all-fours with able-bodied workers. It is only the small percentage in the service industries with whom we are concerned in this Amendment. It is those whom we are trying to help.
6.0 p.m. 
The hon. Lady and I approach this question from totally different angles. I want to weigh the scales slightly in favour of the disabled. It would be only very slightly and marginally, but we are in very difficult economic circumstances. We are in circumstances where the disabled in any case, even if they are in full employment in a sheltered industry, are at greater risk than any other section of the community. They have to have transport. This is to be more expensive. They have higher laundry and cleaning bills, often because of the nature of their disablement. 
From the beginning we want to weigh the scales in favour of protecting people. I have been an employer of labour. I hope that I was a humane and compassionate employer of labour. We had


some difficult times in the immediate post-war years when I took over the management in my industry. I know that one must be ruthless when balancing who to employ. There are many occasions when one must say, "I must make my head govern my heart", as the hon. Lady has done today. If the hon. Lady had followed the dictates of her heart, she would not have adduced the arguments which she presented to the Committee. She would have given way immediately. 
Employers who are trying to get through a stringent economic situation and who are fighting for every penny of a very narrow profit margin will have to look harshly at those on their labour roll, if the Government measures are to work, as they must work if the nation is to pull itself out of its present difficulties. The firms which must make such an appraisal will be the small firms. The big firms can carry one or two extra people. I am not so much worried about them. I am worried about the disabled who are employed by small firms. Such firms may well have to say in this economic crisis, "X who is legless, is inflexible, because he can do only one job ". Last night reference was made to the fact that a badly disabled cashier behind a cash desk could not help in a shop because of his disability. 
All known factors have to be weighed. The sickness record is very often weighed in the balance. We all know that in bad weather it is often impossible for disabled people to get to work. Therefore, an employer of disabled workers has to have a bigger margin. 
I approach this question on the basis that, if social justice and compassion mean anything at all, this is an argument which should weigh very heavily with us, particularly at this time. It was relevant when this tax was introduced, but it is even more relevant today, because we are discussing the tax in a new set of circumstances, when we know that, if the Prime Minister's "shake-out" is to mean anything, it will mean difficult circumstances for many people and it will mean unemployment. 
The hon. Lady has said that these people can be retrained and brought back into employment. Of course they can. I

know that the hon. Lady appreciates the agonies of mind which people undergo through having to be retrained and rehabilitated. It is easy to say that somebody who has been dismissed from an undertaking in, say, Melton Mowbray can be retrained, that there is probably a vacancy in Loughborough in a manufacturing industry which such a person can fill. 
However, it is not only a question of retraining. It is a question of moving the person and of all the difficulties of rehabilitating him in different circumstances. I hope that hon. Members will take the opportunity of visiting the exhibition presently being held in the Central Hall, which I have visited. It is organised by the World Federation of Occupational Therapists, and people from all over the world are showing aids they have thought out to help people in their everyday lives. What struck me was the excitement which the disabled feel when some little extra help is provided which enables them to go into employment or to lead a fuller life. 
Other hon. Members have said how essential it is for these people to be employed. It is essential that they should not be unemployed. The disabled so easily give up hope. After a few months of unemployment, during which they are waiting for a retraining scheme, these people often give up hope and sink back into the lethargy that working in the community does so much to dissipate. First and foremost, the argument here is not an economic one, nor even a logical one. It is one of social justice and of compassion. 
If it is such a small number of people involved, who may or may not be hurt by the tax, surely at this moment in time we have an extra duty to look after this very small residue. I cannot accept the hon. Lady's assurance. She used the words, "if there is any savage effect". I do not hold the word "savage" against the hon. Lady. She does not mean that. She means that, if she finds the problem building up, she will take action. The word "savage" may be the right one, although I do not hold it against the hon. Lady in any context. 
We must not wait until the problem has arrived and people have been hurt by the tax. Large masses of people are not involved. Those involved will not


be easily identifiable. The hon. Lady gives us the assurance that she will wait to see what effect the tax has. What provision is she now making to discover what effect the tax will have? I would guess that no work was put in before the tax was brought in to find out what effect it would have. We have constantly asked what sort of consultations took place and have tried to find out what opinion could be given. These are matters of opinion. We have constantly asked what efforts Ministers have taken, whether it be the Minister of Labour, the Minister of Social Security or the Government as a whole. We have had no answer. 
The truth is that the tax has been introduced without any consultation and no steps have been taken to ensure that we can quickly tell what the effects will be. When the hon. Lady arrives at her Ministry tomorrow morning, I have no doubt that she will put things in train. That is not good enough. We want to know what consultations have already taken place and what steps are in train to discover what effect of the tax will be if we fail to carry our Amendment.

Mr. Peter Bessell: The hon. Lady has referred, I am sure inadvertently, to this being her Amendment. It is a Liberal Amendment.

Miss Pike: I apologise. New Clause No.4is being discussed with this Amendment. My mind was directed to the new Clause in which we asked that those who are on the disablement register be exempted from the tax.
The hon. Lady also said that it was not easy to discover the numbers on the disablement register, because the terms were drawn very wide and there was doubt whether some people would get on to it. She said that perhaps there would be some dishonesty. The burden of her case was whether there could be some dishonesty in people getting on to the register to get the repayment, therefore bringing the whole matter into disrepute.

Mrs. Shirley Williams: I should not like it to be thought that I was imputing dishonesty, but, rather, that there would be many cases of people who would be likely to apply to get on the register,

whereas people more severely disabled than them were not on it.

Miss Pike: I recognise that, but, in reality, there could well be loopholes for dishonesty. I was, of course, taking the case to the extreme. I would not accept it as a valid argument, although there may well be some cases where people will try to get on the register who are not as worthy to be on it as those who are already on it. One of the great advantages of the Amendment would be that more people would go on to the register.
All those I have talked to about this are concerned that so many people will not get themselves on to the register because, particularly in days of overfull employment, they can get jobs without recourse to the register. All the organisations trying to do things for these people know that there are far more disabled than they can account for on the register. One of the side effects of the Amendment, and a great advantage, would be that people genuinely disabled would get on to the register.
I hope that I have dealt with the majority of the hon. Lady's arguments, but it is primarily an issue of social justice. There is, of course, the economic factor as well. For example, disabled people are less a charge on public funds when they are in work and they themselves are better off in work. If unemployed, they are more expensive to retrain. They are far more liable to go on to National Assistance and stay there. There is a reasonable economic case for trying to keep them in work.
I ask the hon. Lady to look at this again. It is not good enough for the Government to say that they will take action once the crisis has arisen, the damage done and suffering caused to these people; once they have been shown to be unemployed and it has been proved that our arguments were right; and once it has been shown that, in a difficult economic situation, with labour becoming more fluid, the disabled are a risk. What we ask is that the Government shall take action on behalf of these people here and now and weight the balance slightly in their favour so that, in the difficult months ahead, they will feel that they have security.

Mr. Bellenger: I wonder if the Committee will bear with me for a moment. It


is true that the Amendment is not from the principal Opposition but, in view of the support given to it from both sides of the Committee, notably on this side, I hope Vat the sponsors will feel disposed not to press it to a Division.
My reason is that the arguments that I put have, in large part, been met. My hon. Friend the Parliamentary Secretary to the Ministry of Labour has shown a sympathetic attitude that is not always the condition of the Government after a debate of this kind. She has tried to show that she sympathises with the purpose of the Amendment and has given an assurance that the Government will take steps, during the coming year of the working of the tax so far as the disabled are concerned, to remedy any anomalies or defects that occur.
My hon. Friend met the important point that I was concerned with about anomalies. Hon. Members opposite may be concerned with something wider. If the sponsors do not withdraw the Amendment, as they might well do, I shall support the Government in the Lobby against them. I have had my say about the anomalies and my hon. Friend has done her best to meet me. I hope that those of my hon. Friends who have spoken in the same terms will also vote with the Government on this matter.

6.15 p.m.

Mr. Bessell: We have just heard the most extraordinary argument. The Liberal Party put down an Amendment which, Sir Eric, in your wisdom you selected and which has been supported forcefully by right hon. and hon. Members on both sides of the Committee. Now the right hon. Member for Bassetlaw (Mr. Bellenger) suggests that, because his particular argument has been met—not the arguments put forward by the Liberal Party or by Conservatives or even arguments put by his hon. Friends—the Amendment should be withdrawn. We have listened to some strange arguments in this Committee but none more extraordinary than that audacious suggestion.
We know in this Committee that, when Amendrients are discussed on various Bills, the answer has already been decided. The hon. Member for The Hartlepools (Mr. Leadbitter) made this point effectively in a very good speech in which he said that the decisions were made, alas,

not by Ministers but by those who are supposed to be their servants.
One suspects that, all too often, the answer which has been decided long before the debate takes place is one about which the Ministers themselves may have doubts. I am certain from my experience in this Committee and as a Member of the House over the last two years that there have been a number of occasions when members of the Government have been very unhappy with the briefs they have had to read.
But I do not think there can have been many occasions when we have witnessed a member of the Government more obviously unhappy and uncertain of her ground than the hon. Lady the Parliamentary Secretary to the Ministry of Labour in her reply a few minutes ago. We know that, quite often, decisions are made in advance, but it will be a sad day if this Committee is not able to persuade the Government to change their mind on an issue of such importance as this. The hon. Lady said that the whole proposition is based upon a hypothesis that some disabled persons may suffer but that there is no evidence of this. She also indicated that if evidence could be shown the Government would change their mind. I propose to put a case before her as positive evidence and I hope that it may persuade her that it is necessary to fulfil now and not later the pledge that she will change her mind.
Yesterday morning I went to my barber. I found that the man who usually cuts my hair was away and in his place was an assistant whom I had not previously met. During the haircut he told me he had suffered a second thrombosis six months ago and that as a result of a visit to hospital the day before he had been advised that he must now cease full-time employment as a barber and become a part-time employee. He emphasised that it was important that he should continue to do some work but the only job for which he has been trained—and he is in his sixties—is hairdressing.
He put his problem to his employer, who is a very humane man whom I have known for some years. The answer was, "I am sorry but I cannot continue to employ you. If I keep you in my service I must inevitably engage another part-time barber. That means I will have to


pay the Selective Employment Tax twice whereas, if I dispose of your services, I can have one man to do the job and I will pay the tax once only." The hon. Lady has asked for a concrete example. Here is an example, a man who will definitely lose his employment even though he could register tomorrow as a disabled person.

The Chief Secretary to the Treasury (Mr. John Diamond): indicated dissent.

Mr. Bessell: The Chief Secretary shakes his head. I will gladly give way if the right hon. Gentleman wishes to intervene.

Mr. Diamond: The hon. Gentleman said that he would give evidence, but he is putting forward a hypothesis of what might happen in future and has not told us what other full-time employee the barber will get. Perhaps he will tell us that when he next gets his hair cut in six weeks' time, or whatever it may be. He has not said whether the man will get another job elsewhere.

Mr. Bessell: The Chief Secretary has made his point and I will follow it through. He suggests that the effect will be that the employee to whom I have referred, upon losing his employment, will be able to get another and part-time job. That is another hypothesis. The barber will not be able to dispose of his services, because he will not be able to get a full-time barber's job. That is a second hypothesis. I am dealing with the fact and the fact is that the barber to whom I have referred will lose his job and is now physically under notice to quit. The hon. Lady has said that she is not prepared to give way because we are dealing with a hypothesis. I am dealing with fact and it is the Chief Secretary who is dealing with hypotheses and if she is to be logical, the hon. Lady must now change her mind.

Mrs. Shirley Williams: Perhaps I should not cross swords with the hon. Gentleman about logic, but I shall try. The case which he has described arises directly out of an Amendment which we discussed yesterday and which was concerned with the effect on part-time workers. It does not arise on this Amendment which affects the registered

disabled. The gentleman he has mentioned is not registered disabled and, I am afraid, would not be likely so to be, if the reason is that which the hon. Gentleman gave—that he has had a heart attack and in consequence is ill rather than disabled.

Mr. Bessell: It is very difficult to cross swords with the hon. Lady, but I am assured by my hon. Friend the Member for Cheadle (Dr. Winstanley), who is an expert in these matters, that in fact the barber in question would have no difficulty whatever in being put on the register as a disabled person upon application and that it would be a perfectly straightforward matter for which there would be many precedents.

Mrs. Shirley Williams: He is not on the disabled register and in this Amendment we have been discussing people who are disabled and the effects on them, so that I think that my contention stands.

Mr. Bessell: I appreciate the hon. Lady's care and the fact that she is trying very hard to argue her case, but the fact remains that, having been told by his doctor that he may now work only as a part-time employee, because of the disablement which he now has and from which he has not previously suffered, he is entitled to be registered as a disabled person. That being so, if this alleviation were given, he could continue in his employment and his job would be safe and the suffering of a man who has now to suffer because the Government have not taken account of these cases would be prevented.

Mr. Lubbock: If our Amendment were accepted, the employer would have the incentive to employ two people who were disabled, because he would then get the premium twice.

Mr. Bessell: That is true and I am grateful to my hon. Friend for drawing my attention to that.
I turn from that positive case to another. The hon. Lady is concerned not with hypotheses, but with facts and it is therefore best for me to deal with factual cases. Last Saturday night, I had a meeting with a group of sub-postmasters in my constituency. If I had been able to speak last night on the Liberal Amendment dealing with part-time employees,


I would have elaborated their problem, but I will confine myself to one difficulty raised by a sub-posmaster who employs a disabled person.
As we all know, the sub-postmasters are not able to pass on the cost of the Selective Employment Tax. Unlike the Post Office itself, they are in a special position and will suffer acute difficulties as a result of the imposition of this tax. The sub-postmaster to whom I am referring is a man over 70 and his wife is very nearly the same age. They employ one part-time assistant who is disabled and who is registered as a disabled person. The tax will be paid on that person's services.
As this is a rural post office in a small village, the sub-postmaster will find it impossible to retain the services of that disabled person. I am sure that the hon. Lady will agree that in the villages of Cornwall and other parts of the British Isles there is no possibility of finding alternative employment and there is no chance of going into industry. In Cornwall, as in the rest of the West Country, we have thousands of people seeking employment in industry and available on the labour market. There is no chance of a disabled person, working part-time in a sub-post office, finding new employment. All that will happen will be suffering to the disabled person and to the elderly couple who run the sub-post office and, consequently, to the community which will get a much poorer service than would otherwise be the case.
I have put two positive examples to the Committee. The hon. Lady has given an assurance that if the Government can be shown that these arguments are not hypotheses but are based on fact, they will reconsider their position. The hon. Lady must therefore agree that she has no alternative but to accept the Amendment and to ensure that disabled persons employed, not in industry—I accept the argument about that—but in small shops and hotels and catering establishments and a whole variety of trades and services throughout the country which are not covered by her arguments, will be allowed the peace of mind and the absence of suffering which would result from accepting a simple Amendment which would cost the Government a negligible sum of money and which would immensely increase their stature in the country.
There have been many occasions when my hon. and right hon. Friends and I have had cause to criticise the Labour Party and the Labour Government. Although it may be argued, as I have sometimes argued myself, that they seem to lack head, I do not think that the worst enemy of Labour could say that they lack heart. The great tradition of the Labour movement throughout its long and honourable history has been always to seek to uphold and to help those who are under-privileged and those who are suffering from no fault of their own, those upon whom the burden of life falls hardly instead of happily.
This Amendment would go a little way towards alleviating the suffering of mind of many people, including my barber of yesterday, and I ask the hon. Lady to look at the matter again. If she will undertake to examine the question again and herself to introduce an Amendment on Report, I am sure that my right hon. and hon. Friends would be willing to withdraw the Amendment. If not, we must press it to a Division.

6.30 p.m.

Dame Joan Vickers: I shall say only a few words at this late hour of the time for debate on this Amendment because I am particularly interested, and have been for a long time, in working for the disabled. The hon. Lady the Parliamentary Secretary, in her well-argued speech, gave us a flurry of figures. I am hoping that, as I got a partial nod yesterday from the Financial Secretary in respect of another Amendment, he may consider the idea that I wish to put forward. In the figures, as I understand them, there are 300,000 people who will get the premium, and 100,000 who will get a refund. There are 200,000 in the service industries whose employers will have to pay the tax.
I suggest that we wipe out the idea of the premiums, which we had argued the employers do not need. As these figures balance out, it would not cost the Government anything at all. They would be saving money, if they act on my suggestion, because the only thing that would happen would be that they would not get their interest-free loan. I would like the hon. Lady to consider this point, because it could be worked out. I would also like to quote a case, not from my constituency, of a man owning a small car


hire firm, employing three drivers and a crippled telephone operator. The owner told me that he would have to get rid of the telephone operator because he could not afford to employ the three drivers and the operator and asked me if I could get him another job. He said that he would have to ask his wife to undertake the telephone operator's work. This tax will put somebody out of employment, and there are other cases which can be cited.

Mr. Ledger: I am trying to follow the hon. Lady's argument. I gather from what she has said that she is not arguing for the removal of the payroll tax from the disabled person because that was not the point that she made. She said that the disabled person would be put out of employment because of the other four people in the firm. This is not in the Amendment.

Dame Joan Vickers: The operator does not pay the tax, but it is a tax upon his services, and it has to be paid by the employer. People are being put out of employment because the employer cannot pay. This has been one of the themes of the argument, and why these disabled people are worried, because it is difficult for a disabled man to get another job.

Mr. Ledger: Is the hon. Lady arguing that, if the telephonist was not disabled, he would not have been given the sack? I cannot see the connection between paying the payroll tax on four people who are not disabled affecting one man who is disabled. This is not in the Amendment.

The Financial Secretary to the Treasury (Mr. Niall MacDermot): I do not know whether the hon. Lady is under a misapprehension, but I think that in the case she has instanced, of the car hire firm, she will find that it is in the refundable category.

Dame Joan Vickers: That is very interesting. We are still more confused now, because we do not know what is refundable and what is not.

Mr. MacDermot: It is all laid out in the Bill. It will be found that it falls under Clause 2(3,a,i) referring to
—any heading in Order XIX (which relates to transport and communication) other than heading 709; ".

The hon. Lady will find that car hire is covered by this Order.

Dame Joan Vickers: I am grateful to the hon. and learned Gentleman. This points to the difficulties in understanding how this will work.

Mr. Braine: We are in some uncertainty as to the numbers of disabled who may be affected. This is conceded by the hon. Lady, I think. Even if there are a substantial number of disabled who are not disadvantaged by this tax, it is clear that a substantial number will be. Would my hon. Friend not agree that no case has yet been made out for applying this tax to any of the disabled?

Dame Joan Vickers: That was the point I made.
I have tried to point out the way in which this could be administered quite easily, by taking the whole category, whether receiving premiums or refunds, out of the Bill altogether. I would have thought that that would have been a fairly easy move. Anyone who holds a blue card and is genuinely disabled should be counted out. This is a distinguishable group. If some of the persons mentioned previously by the hon. Gentleman the Member for Cheadle (Dr. Winstanley), who have not got a blue card, could be encouraged to get one, this difficulty could be overcome.
I am putting this forward as a serious argument. During the war we encouraged disabled people to come into jobs which were broken down for them. This was true of the blind who went into engineering firms to work special machines. It has been agreed by all parties that there should be special legislation for the disabled, and I do not see why we should not have a special category for these people. It was said in the Piercy and Tomlinson Reports, which went into this in detail, that the young disabled, ex-Service and blind, paraplegic and spastic, epileptic and deaf needed immediate attention and the chance to work in a factory.
The Reports said that the term "rehabilitation", in its widest sense, signified the whole process of restoring a disabled person to a condition in which he or she was able, as early as possible, to resume or lead a normal life. All that we are asking for is that these people


should be able to continue in normal life, as they have struggled to do so in the past.
In Plymouth, there is a very big association doing excellent work, and its motto is, "Help Us to Help Ourselves". Here, we are doing exactly the opposite. We are doing what we can to prevent people helping themselves if we allow this to go through without the Amendment of the hon. Gentleman the Member for Cheadle. I wish that hon. Members could have been here a fortnight ago and seen nine disabled people pushed round the Chamber and the House of Lords.
They had saved up their money from their earnings in order to travel to London from Plymouth. There were 29 of them. These people are making every effort to lead a normal life and if their livelihood is taken from them, as it seems may happen, then one is doing a great disservice not only to the individuals, but to the country as a whole. I would like to make a strong plea in support of the Liberal Amendment. The Parliamentary Secretary has said that the administrative difficulties are too great. Everyone would agree that there is considerable anxiety among these people. They are afraid of losing their jobs. When we have experts such as the hon. Gentleman the Member for Cheadle, with personal experience of these matters, we ought to follow the lead set by them.
I hope that all hon. Members who are worried about the situation will join the Liberals in the Division Lobby tonight.

Mr. Gower: The Parliamentary Secretary used all her skill in an endeavour to show that this was not perhaps such a large problem as some of my hon. Friends implied. We do not consider that everybody who is disabled is affected. However, after advancing that argument, she admitted that a sizeable problem remained affecting a considerable body of people. The rest of her argument boiled down to this, that the technical difficulties were of such an order that the Government would rather not introduce the necessary Amendment now.
Why are the Government building up these technical difficulties so enormously? Surely a simple certificate by an employer, who would, if he put in a

wrong certificate, be committing a serious offence, stating that he had in his employment a certain number of people who were on the register of disabled people, would be sufficient.
The hon. Lady went on to say that perhaps additional people would get on the register. If people who should be on the register get on it, all the better. I should not have thought that that was a barrier. The argument that these technical difficulties should postpone what I believe to be a necessary Amendment is not valid, and it comes surprisingly from the hon. Lady and the Government.

Dr. Winstanley: As the mover of the Amendment, I think that I should make clear our attitude to the arguments put very lucidly by the hon. Lady the Parliamentary Secretary. I am bound to say that I do not accept them.
I find surprising her overall attitude to meeting the problem. She said that there might be a problem, but that we should wait to find out whether there is a problem and whether the things that we predict come to pass. In other words, when all the horses have bolted she will run round and ask the Government to lock the stable door. I should have thought that the business of government and politics was to predict the effects of legislation. Like hon. Members on both sides of the Committee, I assure her that what we said will happen will come to pass.
The hon. Lady must be aware of individual cases. It is unfortunate that she is unlikely personally to come across the barber of my hon. Friend the Member for Bodmin (Mr. Bessell), but she will come across many people who are in this predicament. We are not dealing with the global total of disabled people. The hon. Lady spent some time discussing the 300,000 people who will get the premium. We are not talking about them. She spent some time talking about the 100,000 people who will get the repayment.
We are not talking about them. We are talking about the 200,000 who work in service industries and the 48,000 registered disabled people who are unemployed. We are wondering what figure will have to be added when this tax is applied to the service industries and what will be the added effects of


unemployment which is likely to result from other measures about which we have heard. 
6.45 p.m. 
This will be quite a large problem. If the hon. Lady consults her officers in the regions who have to deal with disabled people, and plead with managements to take on people who are not always very useful, she will understand the problem. We are not talking about the useful disabled people, or disabled people who compete with fully fit people —and there are many of them. We are not talking about the blind, who may have developed other compensating abilities which are of great value to their employers. We are talking about people who are not very useful whom we have to ask managements to employ as a favour and find a use for them. They find some use for them, but it is a marginal use. These are people who do not earn the wage which they are paid. They are often paid a small wage. The addition of 25s. a week to a small wage represents a very large percentage increase in the cost of the employee to the firm. 
I cannot accept the Parliamentary Secretary's arguments. I cannot accept that there are difficulties. The hon. Lady said that it was possible that there would be evasion and that people would seek to add their names improperly to

the register. She quoted some remarks which I made in an earlier debate. I was referring to people getting on the register who had no need to do so and, therefore, had not bothered to do so, but who might, in certain circumstances, be encouraged by their employers to do so. This is not illegal. These people are entitled to be on the register, and the hon. Lady concedes that.

The problem may turn out to be greater. The number of people on the register may increase. That would be a good thing. When the Parliamentary Secretary has had more time to consider this aspect of her Ministry she will find that her officials believe that it will be a good thing and that it is important that many disabled people who are not on the register should be on it. It is possible that this Amendment will have that effect.

For these reasons, and for other reasons admirably expressed by hon. Members on both sides of the Committee, I believe that we should be wrong to accept the Parliamentary Secretary's assurances, limited though they were. Therefore, unless we have further assurances, I shall feel bound to advise the Committee to divide on the Amendment.

Question put, That those words be there inserted:—

The Committee divided: Ayes 233, Noes 293.

Division No. 139.]
AYES
[6.47 p.m.


Alison, Michael (Barkston Ash)
Buchanan-Smith, Alick(Angus, N—M)
Dodds-Parker, Douglas


Allason, James (Hemel Hempstead)
Buck, Antony (Colchester)
Douglas-Home, Rt. Hn. Sir Alec


Astor, John
Bullus, Sir Eric
Drayson, G. B.


Atkins, Humphrey (M't'n — M'd'n)
Campbell, Gordon
du Cann, Rt. Hn. Edward


Awdry, Daniel
Carlisle, Mark
Elliot, Capt. Walter (Carshalton)


Baker, W. H. K.
Carr, Rt. Hn. Robert
Elliott, R.W.(N'ctle-upon-Tyne,N.)


Balniel, Lord
Cary, Sir Robert
Errington, Sir Eric


Barber, Rt. Hn. Anthony
Channon, H. P. G.
Eyre, Reginald


Batsford, Brian
Chichester-Clark, R.
Farr, John


Beamish, Col. Sir Tufton
Clark, Henry
Fisher, Nigel


Bell, Ronald
Clegg, Walter
Fletcher-Cooke, Charles


Bennett, Sir Frederic (Torquay)
Cooke, Robert
Fortescue, Tim


Berry, Hn. Anthony
Cooper-Key, Sir Neill
Foster, Sir John


Bessell, Peter
Cordle, John
Galbraith, Hn. T. G.


Biffen, John
Corfield, F. V.
Gibson-Watt, David


Birch, Rt. Hn. Nigel
Costain, A. P.
Giles, Rear-Adm. Morgan


Black, Sir Cyril
Craddock, Sir Beresford (Spelthorne)
Gilmour, Ian (Norfolk, C.)


Blaker, Peter
Crawley, Aidan
Gilmour, Sir John (Fife, E.)


Body, Richard
Crouch, David
Glover, Sir Douglas


Bossom, Sir Clive
Crowder, F. P.
Glyn, Sir Richard


Boyd-Carpenter, Rt. Hn. John
Cunningham, Sir Knox
Gopher, Rt. Hn. J. B.


Boyle, Rt. Hn. Sir Edward
Currie, G. B. H.
Goodhart, Philip


Braine, Bernard
Dalkeith, Earl of
Goodhew, Victor


Brewis, John
Dance, James
Gower, Raymond


Brinton, Sir Tatton
Davidson,James(Aberdeenshire,W.)
Grant, Anthony


Bromley-Davenport,Lt.COL. Sir Walter
d'Avigdor-Goldamid, Sir Henry
Grant-Ferris, R.


Brown, Sir Edward (Bath)
Dean, Paul (Somerset, N.)
Gresham Cooke, R.


Bruce-Gardyne, J.
Deedes, Rt. Hn. W. F. (Ashford)
Griffiths, Eldon (Bury St. Edmunds)


Bryan, Paul
Digby, Simon Wingfield
Grimond, Rt. Hn. B. J.




Gurden, Harold
McMaster, Stanley
Ridsdale, Julian


Hall, John (Wycombe)
Macmillan, Maurice (Farnham)
Rippon, Rt. Hn. Geoffrey


Hall-Davis, A. G. F.
Maddan, Martin
Robson Brown, Sir William


Hamilton, Michael (Salisbury)
Maginnis, John E.
Rodgers, Sir John (Sevenoaks)


Harris, Reader (Heston)
Marples, Rt. Hn. Ernest
Roots, William


Harrison, Brian (Malden)
Marten, Neil
Rossi, Hugh (Hornsey)


Harrison, Col. Sir Harwood (Eye)
Mathew, Robert
Royle, Anthony


Harvey, Sir Arthur Vere
Maude, Angus
Russell, Sir Ronald


Harvie Anderson, Miss
Maudling, Rt. Hn. Reginald
St. John-Stevas, Norman


Hawkins, Paul
Maxwell-Hyslop, R. J.
Scott, Nicholas


Hay, John
Maydon, Lt.-Cmdr. S. L. C.
Sharpies, Richard


Heald, Rt. Hn. Sir Lionel
Mills, Peter (Torrington)
Shaw, Michael (Sc'b'gh — Whitby)


Heath, Rt. Hn. Edward
Mills, Stratton (Belfast, N.)
Sinclair, Sir George


Helseltine, Michael
Miscampbell, Norman
Smith, John


Higgins, Terence L.
Mitchell, David (Basingstoke)
Stainton, Keith


Hirst, Geoffrey
Monro, Hector
Steel, David (Ruxburgh)


Hobson, Rt. Hn. Sir John
Mere, Jasper
Stodart, Anthony


Hogg, Rt.Hn. Quintin
Morgan, W. G. (Denbigh)
Stoddart-Scott, Col. Sir M. (Ripon)


Holland, Philip
Morrison, Charles (Devizes)
Tapsell, Peter


Hooson, Emlyn
Mott-Radclyffe, Sir Charles
Taylor, Sir Charles (Eastbourne)


Hordern, Peter
Munro-Lucas-Tooth, Sir Hugh
Taylor,Edward M.(G'gaw,Carthcart)


Homby, Richard
Murton, Oscar
Taylor, Frank (Moss Side)


Howell, David (Guildford)
Nabarro, Sir Gerald
Teeing, Sir William


Hunt, John
Neave, Airey
Temple, John M.


Hutchison, Michael Clark
Nicholls, Sir Harmar
Thatcher, Mrs. Margaret


Iremonger, T. L.
Noble, Rt. Hn. Michael
Thorpe, Jeremy


Irvine, Bryant Godman (Rye)
Nett, John
Tilney, John


Jenkin, Patrick (Woodford)
Onslow, Cranley
Turton, Rt. Hn. R. H.


Johnson Smith, C. (E. Grinstead)
Orr, Capt. L. P. S.
van Straubenzee, W. R.


Johnston, Russell (Inverness)
Orr-Ewing, Sir Ian
Vaughan-Morgan, Rt. Hn. Sir John


Jones, Arthur (Northants, S.)
Osborn, John (Hallam)
Vickers, Dame Joan


Jopling, Michael
Osborne, Sir Cyril (Louth)
Wainwright, Richard (Colne Valley)


Joseph, Rt. Hn. Sir Keith
Page, Graham (Crosby)
Walker, Peter (Worcester)


Kerby, Capt. Henry
Page, John (Harrow, W.)
Walker-Smith, Rt. Hn. Sir Derek


Kershaw, Anthony
Pardoe, John
Walters, Dennis


Kimball, Marcus
Pearson, Sir Frank (Clitheroe)
Ward, Dame Irene


King, Evelyn (Dorset, S.)
Peel, John
Weatherill, Bernard


Kitson, Timothy
Percival, Ian
Webster, David


Knight, Mrs. Jill
Peyton, John
Whitelaw, William


Lancaster, Col. C. G.
Pike, Miss Mervyn
Wills, Sir Gerald (Bridgwater)


Legge-Bourke, Sir Harry
Pink, R. Bonner
Wilson, Geoffrey (Truro)


Lewis, Kenneth (Rutland)
Pounder, Hatton
Wolrige-Gordon, Patrick


Lloyd,Rt. Hn.Geoffrey(Sut'nC'dfield)
Powell, Rt. Hn. J. Enoch
Wood, Rt. Hn. Richard


Lloyd, Rt. Hn. Selwyn (Wirral)
Price, David (Eastleigh)
Woodnutt, Mark


Longden, Gilbert
Prior, J. M. L.
Worsley, Marcus


Loveys, W. H.
Pym, Francis
Younger, Hn. George


MacArthur, Ian
Quennell, Miss J. M.
TELLERS FOR THE AYES:


Mackenzie,Alasdair(Ross—Crom'ty)
Rawlinson, Rt. Hn. Sir Peter
Mr. Lubbock and Dr. Winstanley


Maclean, Sir Fitzroy
Renton, Rt. Hn. Sir David



Macleod, Rib Hn. lain
Ridley, Hn. Nicholas





NOES


Abso, Leo
Brooks, Edwin
Davies, Robert (Cambridge)


Altaun, Frank (Salford, E.)
Broughton, Dr. A. D. D.
de Freitas, Sir Geoffrey


Andritt, Walter
Brown,Bob(N'c'tle-upon-Tyne,W.)
Delargy, Hugh


Allen, Scholefield
Brown, Hugh D. (G'gow, Proven)
Dell, Edmund


Anderson, Donald
Brown, R. W. (Shoreditch — F'bury)
Dempsey, James


Archer, Peter
Buchan, Norman
Dewar, Donald


Armstrong, Ernest
Buchanan, Richard (G'gow, Sp'burn)
Diamond, Rt. Hn. John


Ashley, Jack
Butler, Herbert (Hackney, C.)
Dickens, James


Atkins, Ronald (Preston, N.)
Butler, Mrs. Joyce (Wood Green)
Dobson, Ray


Atkinson, Norman (Tottenham)
Cant, R. B.
Doig, Peter


Bacon, Rt. Hn. Alice
Carmichael, Neil
Donnelly, Desmond


Bagier, Gordon A. T.
Carter-Jones, Lewis
Driberg, Tom


Barnes, Michael
Castle, Rt. Hn. Barbara
Dunn, James A.


Barnett, Jail
Chapman, Donald
Dunwoody, Mrs. Gwyneth (Exeter)


Beaney, Alan
Coe, Denis
Dunwoody, Dr. John (F'th — C'b'e)


Bellenger, Rt. Hn. F. J.
Coleman, Donald
Eadie, Alex


Benn, Rt. Hn. Anthony Wedgwood
Concannon, J. D.
Edelman, Maurice


Bennett, James (G'gow, Bridgeton)
Conlan, Bernard
Edwards, Robert (Bilston)


Binns, John
Craddock, George (Bradford, S.)
Edwards, William (Merioneth)


Bishop, E. S.
Crawshaw, Richard
Ellis, John


Blackburn, IF.
Cronin, John
English, Michael


Blenkinsop, Arthur
Crosland, Rt. Hn. Anthony
Ennals, David


Boardman, H.
Grossman, Rt. Hn. Richard
Ensor, David


Booth, Albert
Cullen, Mrs. Alice
Evans, Albert (Islington, S.W.)


Boston, Terence
Dalyell, Tam
Evans, loan L. (Birm'h'm, Yardley)


Bottomley, Rt. Hn. Arthur
Darling, Rt. Hn. George
Fernyhough, E.


Bowden, Rt. Hn. Herbert
Davidson, Arthur (Accrington)
Finch, Harold


Boyden, James
Davies, Dr. Ernest (Stretford)
Fletcher, Raymond (Ilkeston)


Braddock, Mrs. E. M.
Davies, G. Elfed (Rhondda, E.)
Fletcher, Ted (Darlington)


Bradley, Tom
Davies, Ednyyfed Hudson (Conway)
Floud, Bernard


Bray, Dr. Jeremy
Davies, Harold (Leek)
Foley, Maurice







Foot, Michael (Ebbw Vale)
Lyons, Edward (Bradford, E.)
Roberts, Gwilym (Bedfordshire, S.)


Ford, Ben
McCann, John
Robertson, John (Paisley)


Forrester, John
MacColl, James
Robinson, Rt Hn.Kenneth(St.P'c'as)


Fowler, Gerry
MacDermot, Niall
Robinson, W. 0. J. (Walth'stow, E.)


Fraser, Rt. Hn. Tom (Hamilton)
Macdonald, A. H.
Roebuck, Roy


Freeson, Reginald
McGuire, Michael
Rogers, George


Gardner, A. J.
Mackenzie, Gregor (Rutherglen)
Rose, Paul


Garrow, Alex
Mackie, John
Roes, Rt. Hn. William


Ginsburg, David
Mackintosh, John P.
Rowland, Christopher (Meriden)


Gordon Walker, Rt. Hn. P. C.
Maclennan, Robert
Rowlands, E. (Cardiff, N.)


Gourlay, Harry
McMillan, Tom (Glasgow, C.)
Ryan, John


Gray, Dr. Hugh (Yarmouth)
McNamara, J. Kevin
Shaw, Arnold (Ilford, S.)


Greenwood, Rt. Hn. Anthony
MacPherson, Malcolm
Sheldon, Robert


Gregory, Arnold
Mahon, Peter (Preston, S.)
Shinwell, Rt. Hn. E.


Grey, Charles (Durham)
Mallalieu, E. L. (Brigg)
Shore, Peter (Stepney)


Griffiths, David (Rother Valley)
M anal ieu,J.P.W.(Huddersfield,E.)
Short, Mrs. Renee (W'hampton,N.E.)


Griffiths, Rt. Hn. James (Llanelly)
Manuel, Archie
Silkin, John (Deptford)


Griffiths, Will (Exchange)
Mapp, Charles
Silkin, S. C. (Dulwich)


Hamilton, James (Bothwell)
Marquand, David
Silverman, Julius (Aston)


Hamilton, William (Fife, W.)
Marsh, Rt. Hn. Richard
Silverman, Sydney (Nelson)


Hamling, William
Mayhew, Christopher
Skeffington, Arthur


Hannan, William
Mellish, Robert
Small, William


Harper, Joseph
Mendelson, J. J.
Snow, Julian


Harrison, Walter (Wakefield)
Millan, Bruce
Spriggs, Leslie


Hart, Mrs. Judith
Miller, Dr. M. S.
Steele, Thomas (Dunbartonshire, W.)


Hazen, Bert
Mitchell, R. C. (S'th'pton, Test)
Stewart, Rt. Hn. Michael


Heffer, Eric S.
Molloy, William
Stonehouse, John


Henig, Stanley
Morgan, Elysian (Cardiganshire)
Strauss, Rt. Hn. G. R.


Hilton, W. S.
Morris, Alfred (Wythenshawe)
Summerskill, Hn. Dr. Shirley


Hooley, Frank
Morris, Charles R. (Openshaw)
Swain, Thomas


Homer, John
Morris, John (Aberavon)
Swingler, Stephen


Houghton, Rt. Hn. Douglas
Moyle, Roland
Symonds, J. B.


Howarth, Harry (Wellingborough)
Mulley, Rt. Hn. Frederick
Taverne, Dick


Howarth, Robert (Bolton, E.)
Murray, Albert
Thomas, George (Cardiff, W.)


Howie, W.
Neal, Harold
Thomas, lorwerth (Rhondda, W.)


Hoy, James
Newens, Stan
Thornton, Ernest


Hughes, Emrys (Ayrshire, S.)
Noel-Baker, Francis (Swindon)
Tinn, James


Hughes, Hector (Aberdeen, N.)
Norwood, Christopher
Tomney, Frank


Hunter, Adam
Oakes, Gordon
Urwin, T. W.


Hynd, John
Ogden, Eric
Varley, Eric C.


Jackson, Colin (B'h'se — Spenb'gh)
O'Malley, Brian
Wainwright, Edwin (Dearne Valley)


Jackson, Peter M. (High Peak)
Orhach, Maurice
Walden, Brian (Ali Saints)


Jeger, George (Goole)
Orme, Stanley
Walker, Harold (Doncaster)


Jenkins, Hugh (Putney)
Oswald, Thomas
Wallace, George


Jenkins, Rt. Hn. Roy (Stechford)
Owen, Dr. Davis (Plymouth, S'tn)
Watkins, David (Consett)


Johnson, Carol (Lewisham, S.)
Owen, Will (Morpeth)
Weitzman, David


Johnson, James (K'ston-on-Hull, W.)
Padley, Walter
Wellbeloved, James


Jones, Dan (Burnley)
Page, Derek (King's Lynn)
Wells, William (Walsall, N.)


Jones, J. Idwal (Wrexham)
Palmer, Arthur
Whitaker, Ben


Judd, Frank
Pannell, Rt. Hn. Charles
White, Mrs. Eirene


Kelley, Richard
Parkyn, Brian (Bedford)
Whitlock, William


Kenyon, Clifford
Pearson, Arthur (Pontypridd)
Williams, Alan (Swansea, W.)


Kerr, Mrs. Anne (R'ter — Chatham)
Pearl, Rt. Hn. Fred
Williams, Alan Lee (Homchurch)


Kerr, Russell (Feltham)
Pentland, Norman
Williams, Clifford (Abertillery)


Lawson, George
Perry, Ernest G. (Battersea, S.)
Williams, Mrs. Shirley (Hitchin)


Leadbitter, Ted
Perry, George H. (Nottingham, S.)
Williams, W. T. (Warrington)


Ledger, Ron
Price, Thomas (Westhoughton)
Willis, George (Edinburgh, E.)


Lee, Rt. Hn. Frederick (Newton)
Price, William (Rugby)
Wilson, William (Coventry, S.)


Lee, Rt. Hn. Jennie (Cannock)
Probert, Arthur
Winnick, David


Lee, John (Reading)
Purley, Cmdr. Harry
Winterbottom, R. E.


Lestor, Miss Joan
Rankin, John
Woof, Robert


Lever, L. M. (Ardwick)
Redhead, Edward
Wyatt, Woodrow


Lewis, Arthur (W. Ham, N.)
Rees, Merlyn
Yates, Victor


Lewis, Ron (Carlisle)
Reynolds, G. W.
Zilliacus, K.


Lomas, Kenneth
Rhodes, Geoffrey
TELLERS FOR THE NOES:


Loughlin, Charles
Richard, Ivor
Mr. McBride and Mr. Fitch.


Luard, Evan
Roberts, Albert (Normanton)



Lyon, Alexander W. (York)
Roberts, Goronwy (Caernarvon)

Mr. Iain Macleod: I beg to move Amendment No. 303, in page 2, line 23, at the end to insert:
(IA) This section applies to any employment whether in any qualifying or non-qualifying activity which is employment by an employer carrying on by way of business a trading organisation concerned wholly or substantially with one or more of the following activities,

(a) exploration for shale oil, crude petroleum or natural gas;
(b) extracting shale oil, crude petroleum or natural gas;
(c) refining and processing of shale oil or crude petroleum;
(d) blending mineral oils or greases at refineries or in association with the refining of shale oil or crude petroleum;
(e) importation by ship or pipe of shale oil or crude petroleum or natural gas or of hydrocarbon oils;
(f) bulk storage and bulk transportation by any means, or bulk distribution of shale



oil, crude petroleum, natural gas or hydrocarbon oils other than at or from depots or establishments which are outside the curtilage of any refinery and which are wholly or substantially engaged in supplying hydrocarbon oils by retail to non-industrial and non-agricultural consumers;
(g) research development education or training relating to any of the foregoing activities;

and section 1 of this Act shall not apply to employment by any such employer.
I do not propose to spend any of the remaining 12 minutes or so in talking about the absurd restriction under which the Committee is now operating. The list of Amendments that could be discussed, amounting to 98 on this Clause alone, is sufficient evidence of that.
Yesterday, we had a situation that was so lunatic that it almost defies comment. Immediately after the Prime Minister's statement, we came to an Amendment on which we were begging Ministers on the Treasury Bench not to spend £133 million. This was urged on them from both sides of the Committee by members of all three parties, but they insisted that it was their bounden duty, as Treasury Ministers, to waste this amount of money, which they promptly proceeded to do.
Today, we have an Amendment concerning the oil industry, on which I genuinely believe that the case is unanswerable. I do not know who will reply, if there it time for a reply—probably not—but I wish to put the case as moderately as possible and I am glad that the Minister of Power is here to listen to it.
The last line of the Amendment would remove from the oil industry the benefit of the premium, if benefit it be, under Clause 1 of the Bill. That is understood and accepted by the industry. Of course, some firms would benefit from that more that others.
7.0 p.m.
The purpose of the Amendment is clear. It is designed to put the oil industry on the same footing as the other providers of energy in the fuel and power sector by treating the industry as though it were included in Schedule 1 as a body to which refund of payments should be made. That is wholly in accord with the White Paper. The very first effective paragraph of the White Paper on the Selective Employment Tax says:
…it will improve the structure of the tax system by redressing the balance between ser-

vices and manufacturing. Services, including distribution, have hitherto been lightly taxed as compared with manufactured products, which are subject to excise duties and the Purchase Tax.
Whatever the merits of that argument may be, it can have no conceivable relevance to the oil industry, which is most viciously taxed and which has been taxed again as a result of yesterday's measures.
The next paragraph in the White Paper says:
 In this way, the tax will provide a means of restraining consumer demand without again hitting severely those industries upon which indirect taxation is at present concentrated ".
Once again, the two main premises of the White Paper argue for the case which I am putting. No less than £773 million was taken in receipts from oil duties in the calendar year 1965, so I am informed, and no one can argue that that is not an enormous burden, which, as I say, was added to by yesterday's proposals.
Thus, if the Government believe their own precepts in the White Paper, they must accept the Amendment, which would provide that the whole of the oil industry should be nut into the neutral zone.
There are two ways in which I can shortly illustrate the discrimination which arises for the oil industry as compared with the publicly-owned sector of fuel and power. First, the activities under the heading of miscellaneous transport services are excluded from the provision for refund, but these activities are an essential part of the oil industry's operation, and —this is the key point—corresponding activities in the public sector qualify for a refund. Plainly, it would be monstrous not to treat the oil industry in exactly the same way.
Second, in the interests of overall efficiency in what is an extremely efficient industry, the bulk of employees are concentrated in offices away from the actual manufacturing or operating points. This is inevitable in the way the system is run. We all know of a great building not many yards from here which houses many hundreds of employees of the industry, but they are excluded from the refund provisions. On the other hand, locking the other way, to Hobart House, the headquarters of the National Coal Board, the head offices of the public sector there qualify for refund. It is impossible to justify this distinction.
There are other Amendments on similar matters with reference to electricity and gas showrooms, and so on, if we can come to them at an appropriate stage. All I say at this stage is that it quite impossible to justify this sort of distinction between a great private enterprise industry and the publicly-owned industries operating in the same field and in direct competition. 
There are many other anomalies which arise for this complex and vital industry. Often the difficulties come, as so many of our difficulties will come under this Bill, from the simple fact that we are taking what is basically a statistical measurement—nothing more than that—and making it the basis of our assessment of industry. It has nothing whatever to do with industry in the sense of what is really being done. It is entirely for the backroom "boffins" in the Ministry of Labour and elsewhere to count heads —nothing whatever to do with industry in the real sense of the word. 
In this connection, I mention the question of storage. I am grateful to the Minister of Power for coming to hear this short debate, and I hope that he will at leisure carefully examine the points which are made. I know that he will. The storage of oil products either in bulk plants or in terminals, that is, prior to the delivery to the customer, is comparable to the end storage in an ordinary factory which would be a qualifying activity for the calculation of refund and the rest. 
In the oil industry, it is a matter of efficiency and group convenience whether or not these bulk plants or terminals are operated by the refining company, by another group company or in some other way. Because they do this on the basis of efficiency, they should not be penalised by the haphazard methods provided in the Bill, which, in many cases, will put a direct premium upon inefficiency. I am sure that the oil companies could rejig their system all through in order to get some of the benefits, but that would be an absurd way of going about things when a great industry is already organised in what it regards as the most efficient way. 
My final point on transport is that I am not sure that the Government Amendment No. 230, in page 3, line 10, to

leave out from "709" to the end of line 22 and to insert:

(aa) activities by way of the extraction of coal from open-cast workings;
(ab) activities by way of the operation of road transport for the purposes of another establishment which is both an associated establishment and an establishment such as is mentioned either in section 1(2) of this Act or in subsection (2) of this section;
(ac) activities, research or training such as are mentioned in section 1(2)(a) of this Act, or a combination of such activities, research or training and any activities such as are mentioned in paragraph (a) or (aa) of this subsection;

really helps in this connection. I do not think that it does. The point here is that the transporting of the product to the customer can be carried out in half a dozen different ways, by the refining company, by the storage company or by an independent contractor, and it can be done by road, by rail, by water, or even, conceivably, sometimes by air.
Since the independent transport undertakings of British Rail and the rest are to have the tax refunded, it seems only fair that the oil industry's own transport fleets, whether they consist of road vehicles or rail tank cars, should be regarded in the same way. More than half the total volume of these products is delivered to industry, and they are an essential raw material for industry for power and heat and in some cases an actual raw material in the manufacturing process itself.
Inevitably, I have had to gallop through the argument, but the case I have put to the Committee is unanswerable. I do not ask for a reply now—let us leave that, if we may—but I hope that the Government will be ready sympathetically to look in some detail at this case. I have been into it with as much care as I can, and I believe that the argument for the whole oil industry being taken out of these different parts of the Bill and treated wholly for refund is completely unanswerable and should be accepted.

Mr. Diamond: I gather that the right hon. Member for Enfield, West (Mr. lain Macleod) did not necessarily want to go straight on to the next Amendment, and that an answer, however short, is better than no answer.
The main points in the answer will be these. First, at least one half of the products of the oil industry are not in direct


competition at all. The Amendment proposes a variation affecting the whole oil industry. and it must fall in the first place on that major ground, that at least half are not involved at all.
Second, if he looks more closely at the new Government Amendment No. 230, the right hon. Gentleman will find that it is very helpful. I do not want to go into it now. I merely direct attention to it. My hon. and learned Friend the Financial Secretary, who would have handled the Amendment himself, will be only too glad to discuss the matter with the right hon. Gentleman or write to him about it.
Thirdly, it is not the case that the refunds to the nationalised industries are based on considerations of the classifi-

cation, or anything of that kind, but merely that nationalised industries do not have to have the same consideration with regard to economy in the use of labour or a variety of other things—

The Chairman: Order.

It being ten minutes past Seven o'clock (the House having resolved itself into the Committee at ten minutes past Four o'clock), The CHAIRMAN proceeded, pursuant to Order [18th July], to put forthwith the Question already proposed from the Chair.

Question put, That the proposed words be there inserted:—

The Committee divided: Ayes 234, Noes 303.

Division No. 140.]
AYES
[7.10 p.m.


Alison, Michael (Barkston Ash)
Dean, Paul (Somerset, N.)
Howell, David (Guildford)


Allason, James (Hemel Hempstead)
Deedes, Rt. Hn. W. F. (Ashford)
Hunt, John


Astor, John
Digby, Simon Wingfield
Hutchison, Michael Clark


Atkins, Humphrey (m,vn — M'd'n)
Dodds-Parker, Douglas
Iremonger, T. L.


Awdry, Daniel
Doughty, Charles
Irvine, Bryant Godman (Rye)


Baker, W. H. K.
Douglas-Home, Rt. Hn. sir Alec
Jenkin, Patrick (Woodford)


Balniel, Lord
Drayson, G. B.
Johnson Smith, C. (E. Grinstead)


Barber, Rt. Hn. Anthony
du Cann, Rt. Hn. Edward
Johnston, Russell (Inverness)


Batsford, Brian
Elliot, Capt. Walter (Carshalton)
Jones, Arthur (Northants, S.)


Beamish, Col. Sir Tufton
Elliott, R.W.(N'c'tle-upon-Tyne,N.)
Jopling, Michael


Bell, Ronald
Errington, Sir Eric
Joseph, Rt. Hn. Sir Keith


Bennett, sir Frederic (Torquay)
Eyre, Reginald
Kerby, Capt. Henry


Berry, Hn. Anthony
Farr, John
Kershaw, Anthony


Bessell, Peter
Fisher, Nigel
Kimball, Marcus


Biffen, John
Fletcher-Cooke, Charles
King, Evelyn (Dorset, S.)


Birch, Rt. Hn, Nigel
Fortescue, Tim
Kitson, Timothy


Black, Sir Cyril
Foster, Sir John
Knight, Mrs. Jill


Body, Richard
Galbraith, Hn. T. G.
Lancaster, Col. C. G.


Bossom, Sir Clive
Gibson-Watt, David
Legge-Bourke, Sir Harry


Boyd-Carpenter, Rt. Hn. John
Giles, Rear-Adm. Morgan
Lewis, Kenneth (Rutland)


Boyle, tat. Hn. Sir Edward
Gilmour, Ian (Norfolk, C.)
Lloyd,Rit. Hn.Geoffrey(Sut'ne'dfield)


Braine, Bernard
Gilmour, Sir John (Fife, E.)
Lloyd, Rt. Hn. Selwyn (Wirral)


Brewis, John
Glover, Sir Douglas
Longden, Gilbert


Brinton, Sir Tatton
Glyn, Sir Richard
Loveys, W. H.


Bromley-Davenport,L t. Col.Sir Walter
Godber, Rt. Hn. J. B.
Lubbock, Eric


Brown, Sir Edward (Bath)
Goodhart, Philip
MacArthur, Ian


Bruce-Gardyne, J.
Goodhew, Victor
Mackenzie,Alasdair(Ross—Crom'ty)


Bryan, Paul
Gower, Raymond
Maclean, Slr Fitzroy


Buchanan-Smith,Alick(Angus,N—M)
Grant-Ferris, R.
Macleod, Rt. Hn. lain


Buck, Antony (Colchester)
Gresham Cooke, R.
McMaster, Stanley


Bullus, Sir Eric
Griffiths, Eldon (Bury St. Edmunds)
Macmillan, Maurice (Farnham)


Campbell, Cordon
Grimond, Rt. Hn.J.
Madden, Martin


Carlisle, Mark
Gurden, Harold
Maginnis, John E.


Carr, Rt. Fin. Robert
Hall, John (Wycombe)
Marples, Rt. Hn. Ernest


Cary, Sir Robert
Hall-Davis, A. G. F.
Marten, Ned


Channon, H. P. G.
Hamilton, Michael (Salisbury)
Mathew, Robert


Chichester-Clark, R.
Harris, Reader (Heston)
Maude, Angus


Clark, Henry
Harrison, Col. Sir Harwood (Eye)
Maudling, Rt. Hn. Reginald


Clegg, Walter
Harvey, Sir Arthur Very
Maxwell-Hyslop, R. J.


Cooke, Robert
Harvie Anderson, Miss
Maydon, Lt.-Cmdr. S. L. C.


Cooper-Key, Sir Neill
Hawkins, Paul
Mills, Peter (Torrington)


Cordle, John
Hay, John
Mills, Stratton (Belfast, N.)


Corfield, F. V.
Heald, Rt. Hn. Sir Lionel
MisCampbell, Norman


Costain, A. P.
Heath, Rt. Hn. Edward
Mitchell, David (Basingstoke)


Craddock, Sir Beresford (Spelthorne)
Heseltine, Michael
Monro, Hector


Crawley, Aldan
Higgins, Terence L.
More, Jasper


Crouch, David
Hirst, Geoffrey
Morgan, W. G. (Denbigh)


Crowder, F. P.
Hobson, Rt. Hn. Sir John
Morrison, Charles (Devizes)


Currie, C. B. H.
Hogg, Rt. Hn. Quintin
Mott-Radclyffe, Sir Charles


Dalkeith, Earl Of
Holland, Philip
Munro-Lucas-Tooth, Sir Hugh


Dance, James
Hooson, Emlyn
Murton, Oscar


Davidson,Jarnes(Aberdeenshire,W.)
Hordern, Peter
Naharro, Sir Gerald


d'Avigclor-Godsmid, Sir Henry
Hornby, Richard
Neave, Airey




Nicholls, Sir Harmar




Noble, Rt. Hn. Michael
Ridsdale, Julian
Tilney, John


Nott, John
Rippon, Rt. Hn. Geoffrey
Turton, Rt. Hn. R. H.


Onslow, Cranley
Robson Brown, Sir William
van Straubenzee, W. R.


Orr, Capt. L. P. s.
Rodgers, Sir John (Sevenoaks)
Vaughan-Morgan, Rt. Hn. Sir John


Orr-Ewing, Sir Ian
Roots, William
Vickers, Dame Joan


Osborn, John (Hallam)
Rossi, Hugh (Hornsey)
Wainwright, Richard (Colne Valley)


Osborne, Sir Cyril (Louth)
Royle, Anthony
Walker, Peter (Worcester)


Page, Graham (Crosby)
Russell, Sir Ronald
Walker-Smith, Rt. Hn. Sir Derek


Page, John (Harrow, W.)
St. John-Stevas, Norman
Walters, Dennis


Pardoe, J.
Scott, Nicholas
Ward, Dame Irene


Pearson, Sir Frank (Clitheroe)
Sharpies, Richard
Weatherill, Bernard


Peel, John
Shaw, Michael (Se'b'es — Whitby)
Webster, David


Percival, Ian
Sinclair, Sir George
Wells, John (Maidstone)


Peyton, John
Smith, John
Whitelaw, William


Pike, Miss Mervyn
Stainton, Keith
Wills, Sir Gerald (Bridgwater)


Pink, R. Bonner
Steel, David (Roxburgh)
Wilson, Geoffrey (Truro)


Pounder, Rafton
Stodart, Anthony
Winstanley, Dr. M. P.


Powell, Rt. Hn. J. Enoch
Stoddart-Scott, Col. Sir M. (Ripon)
Wolrige-Gordon, Patrick


Price, David (Eastleigh)
Tapsell, Peter
Wood, Rt. Hn. Richard


Prior, J. M. L.
Taylor, Sir Charles (Eastbourne)
Woodnutt, Mark


Pym, Francis
Taylor,Edward M.(G'gow,Cathcart)
Worsley, Marcus


Quennell, Miss J. M.
Taylor, Frank (Moss Side)
Younger, Hn. George


Rawlinson, Rt. Hn. Sir Peter
Testing, Sir William
TELLERS FOR THE AYES:


Rees-Davies, W. R.
Temple, John M.
Mr. Blaker and Mr. Grant.


Renton, Rt. Hn. Sir David
Thatcher, Mrs. Margaret



Ridley, Hn. Nicholas
Thorpe, Jeremy





NOES


Abse, Leo
Crosland, Rt. Hn. Anthony
Gregory, Arnold


Albu, Austen
Crossman, Rt. Hn. Richard
Grey Charles (Durham)


Allaun, Frank (Salford, E.)
Cullen, Mrs. Alice
Griffiths, David (Rother Valley)


Alidritt, Walter
Dalyell, Tam
Griffiths, Rt. Hn. James (Llanelly)


Allen, Scholefield
Darling, Rt. Hn. George
Griffiths, Will (Exchange)


Anderson, Donald
Davidson, Arthur (Accrington)
Hamilton, James (Bothwell)


Archer, Peter
Davies, Dr. Ernest (Stretford)
Hamilton, William (Fife, W.)


Armstrong, Ernest
Davies, G. Elfed (Rhondda, E.)
Hamling, William


Ashley, Jack
Davies, Ednyfed Hudson (Conway)
Hannan, William


Atkins, Ronald (Preston, N.)
Davies, Harold (Leek)
Harper, Joseph


Atkinson, Norman (Tottenham)
Davies, Robert (Cambridge)
Harrison, Walter (Wakefield)


Bacon, Rt. Hn. Alice
de Freitas, Sir Geoffrey
Hart, Mrs. Judith


Bagier, Gordon A. T.
Delargy, Hugh
Hazell, Bert


Barnes, Michael
Dell, Edmund
Heffer, Eric S.


Barnett, Joel
Dempsey, James
Henig, Stanley


Heaney, Alan
Dewar, Donald
Hilton, W. S.


Bellenger, Rt. Hn. F. J.
Diamond, Rt. Hn. John
Hooley, Frank


Benn, Rt. Hn. Anthony Wedgwood
Dickens, James
Homer, John


Bennett, James (G'gow, Bridgeton)
Dobson, Ray
Houghton, Rt. Hn, Douglas


Bidwell, Sydney
Doig, Peter
Howarth, Harry (Wellingborough)


Bruns, John
Donnelly, Desmond
Howarth, Robert (Bolton, E.)


Bishop, E. 8.
Driberg, Tom
Howie, W.


Blackburn, F.
Dunn, James A.
Hoy, James


Blenkinsop, Arthur
Dunwoody, Mrs. Gwyneth (Exeter)
Hughes, Emrys (Ayrshire, S.)


Boardman, H.
Dunwoody, Dr. John (F'th — C'b'e)
Hughes, Hector (Aberdeen, N.)


Booth, Albert
Eadie, Alex
Hunter, Adam


Boston, Terence
Edelman, Maurice
Hynd, John


Bottomley, Rt. Hn. Arthur
Edwards, Robert (Ralston)
Irvine, A. J. (Edge Hill)


Bowden, Rt. Hn. Herbert
Edwards, William (Merioneth)
Jackson, Colin (B'h'se — Spenb'gh)


Boyden, James
Ellis, John
Jackson, Peter M. (High Peak)


Braddock, Mrs. E. M.
English, Michael
Jeger, George (Goole)


Bradley, Tom
Ennals, David
Jeger,Mrs.Lena(H'b'n—St.P'eras,S.)


Bray, Dr. Jeremy
Ensor, David
Jenkins, Hugh (Putney)


Brooks, Edwin
Evans, Albert (Islington, S.W.)
Jenkins, Rt. Hn. Roy (Stechford)


Broughton, Dr. A. D. D.
Fernyhough, E.
Johnson, Carol (Lewisham, S.)


Brown,Bob(N'c'tle-upon-Tyne,W)
Finch, Harold
Johnson, James (K'ston-on-Hull, W.)


Brown, Hugh D. (G'gow, Proven)
Fitch, Alan (Wigan)
Jones, Dan (Burnley)


Brown, R. W. (Shoreditch — F'bury)
Fletcher, Raymond (Ilkeston)
Jones, J. Idwal (Wrexham)


Buchan, Norman
Fletcher, Ted (Darlington)
Judd, Frank


Buchanan, Richard (G'gow, Sp'burn)
Floud, Bernard
Kelley, Richard


Butler, Herbert (Hackney, C.)
Foley, Maurice
Kenyon, Clifford


Butler, Mrs. Joyce (Wood Green)
Foot, Sir Dingle (Ipswich)
Kerr, Mrs. Anne (R'ter — Chatham)


Cant, R. B.
Foot, Michael (Ebbw Vale)
Kerr, Russell (Feltham)


Carmichael, Neil
Ford, Ben
Lawson, George


Carter-Jones, Lewis
Forrester, John
Leadbitter, Ted


Castle, Rt. Hn. Barbara
Fowler, Gerry
Ledger, Ron


Chapman, Donald
Fraser, Rt. Hn. Tom (Hamilton)
Lee, Rt. Hn. Frederick (Newton)


Coe, Denis
Freeson, Reginald
Lee, Rt. Hn. Jennie (Cannock)


Coleman, Donald
Gardner, A. J.
Lee, John (Reading)


Concannon, J. D.
Garrow, Alex
Lester, Miss Joan


Conlan, Bernard
Ginsburg, David
Lever, L. M. (Ardwick)


Corbet, Mrs. Freda
Gordon Walker, Rt. Hn. P. C.
Lewis, Arthur (W. Ham, N.)


Craddock, George (Bradford, 8.)
Gourlay, Harry
Lewis, Ron (Carlisle)


Crawshaw, Richard
Gray, Dr. Hugh (Yarmouth)
Lomas, Kenneth


Cronin, John
Greenwood, Rt. Hn. Anthony
Loughlin, Charles







Luard, Evan
Owen, Dr. David (Plymouth, S'tn)
Small, William


Lyon, Alexander W. (York)
Owen, Will (Morpeth)
Snow, Julian


Lyons, Edward (Bradford, E.)
Pulley, Walter
Spriggs, Leslie


McCann, John
Page, Derek (King's Lynn)
Steele, Thomas (Dunbartonshire, W.)


MacColl, James
Palmer, Arthur
Stewart, Rt. Hn. Michael


MacDermot, Nista
Pennon, Rt. Hn. Charles
Stonehouse, John


Macdonald, A. H.
Parkyn, Brian (Bedford)
Strauss, Rt. Hn. G. R.


McGuire, Michael
Pearson, Arthur (Pontypridd)
Summerskill, Hn. Dr. Shirley


Mackenzie, Gregor (Rutherglen)
Peart, Rt. Hn. Fred
Swain, Thomas


Mackie, John
Pentland, Norman
Swingler, Stephen


Mackintosh, John P.
Perry, Ernest G. (Battersea, S.)
Symonds, J. B.


Maclennan, Robert
Perry, George H. (Nottingham, S.)
Taverns, Dick


McMillan, Tom (Glasgow, C.)
Prentice, Rt. Hn. R. E.
Thomas, George (Cardiff, W.)


McNamara, J. Kevin
Price, Thomas (Westhoughton)
Thomas, Iorwerth (Rhondda, W.)


MacPherson, Malcolm
Price, William (Rugby)
Thornton, Ernest


Mahon, Peter (Preston, s.)
Probert, Arthur
Tine, James


Mallalieu, E. L. (Brigg)
Pursey, Cmdr. Harry
Tomney, Frank


Maltalieu,J. P W.(Huddersfield, E.)
Rankin, John
Urwin, T. W.


Manuel, Archie
Redhead, Edward
Varley, Eric G.


Mapp, Charles
Rees, Merlyn
Wainwright, Edwin (Dearne Valley)


Marquand, David
Reynolds, G. W.
Walden, Brian (All Saints)


Marsh, Fit. Hn. Richard
Rhodes, Geoffrey
Walker, Harold (Doncaster)


Maxwell, Robert
Richard, Ivor
Wallace, George


Mayhew, Christopher
Roberts, Albert (Normanton)
Watkins, David (Consett)


Mellish, Robert
Roberts, Goronwy (Caernarvon)
Weitzman, David


Mendelson, J. J.
Roberts, Gwllym (Bedfordshire, S.)
Wellbeloved, James


Millan, Brute
Robertson, John (Paisley)
Wells, William (Walsall, N.)


Miller, Dr. M. S.
Robinson, Rt.Hn.Kerineth(St.P'c'as)
Whitaker, Ben


Mitchell, FI, C. (S'th'pton, Test)
Robinson, W. 0. J. (Walth'stow, E.)
White, Mrs. Eirene


Molloy William
Rodgers, William (Stockton)
Whitlock, William


Morgan, Elystan (Cardiganshire)
Roebuck, Roy
Wigg, Rt. Hn. George


Morris, Alf red (Wythenshawe)
Rogers, George
Williams, Alan (Swansea, W.)


Morris, Charles R. (Openshaw)
Rose, Paul
Williams, Alan Lee (Hornchurch)


Morris, John (Aberavon)
Ross, Rt. Hn. William
Williams, Clifford (Abertillery)


Moyle, Roland
Rowland, Christopher (Meriden)
Williams, Mrs. Shirley (Hitchin)


Mulley, Fit. Hn. Frederick
Rowlands, E. (Cardiff, N.)
Williams , W. T. (Warrington)


Murray, Albert
Ryan, John
Willis, George (Edinburgh, E.)


Neal, Harold
Shaw, Arnold (Ilford, S.)
Wilson, William (Coventry, S.)


Newens, Stan
Sheldon, Robert
Winnick, David


Noel-Baker, Francis (Swindon)
Shinwell, Rt. Hn. E.
Winterbottom, R. E.


Norwood, Christopher
Shore, Peter (Stepney)
Woof, Robert


Oakes, Gordon
Short, Mrs. Renée (W'hampton,N.E.)
Wyatt, Woodrow


Ogden, Eric
Silkin, John (Deptford)
Yates, Victor


O'Malley, Brian
Silkin, S. C. (Dulwich)
Zilliacus, K.


Orbach, Maurice
Silverman, Julius (Aston)
TELLERS FOR THE NOES:


Orme, Stanley
Silverman, Sydney (Nelson)
Mr. McBride and Mr. loan L. Evans.


Oswald, Thomas
Skeffington, Arthur

The CHAIRMAN then proceeded successively to put forthwith the Questions on Amendments, moved by a member of the Government, of which notice had been given, to the Clause and the further Question necessary to complete the Proceedings on the Clause.

Amendments made: In page 2, line 30, leave out "(b) and "and insert" to ".

In line 33, leave out
 for the purposes of the "and insert" in any employment in, or carried out from, that ".

In line 35, leave out "normally so employed" and insert:
so employed wholly or mainly".

In line 37, leave out "normally so employed only" and insert
so employed wholly or mainly".

In line 41, at end insert:
or in training relevant to any activities mentioned in that paragraph or in paragraphs (a) to (ab) of that subsection, or the establishment is certified by the Minister of Technology to be engaged in scientific research relevant to

any activities mentioned in the said paragraphs (a) to (ab)".

In page 3, line 8, after "quarrying)", insert
 heading 602 or 603 (which relate to electricity and water supply) ".

In line 10, leave out from "709 to end of line 22 and insert:
(aa) activities by way of the extraction of coal from open-cast workings;
(ab) activities by way of the operation of road transport for the purposes of another establishment which is both associated establishment and an establishment such as is mentioned either in section 1(2) of this Act or in subsection (2) of this section;
(ac) activities, research or training such as are mentioned in section 1(2)(a) of this Act, or a combination of such activities, research or training and any activities such as are mentioned in paragraph (a) or (aa) of this subsection;

In line 30, leave out from "to" to "the" in line 31, and insert:
 any activities other than activities falling under minimum list heading 703 in the Standard Industrial Classification ".

In line 39, leave out "paragraph (a) or (b)" and insert:
 any of paragraphs (a) to (ac)".—[Mr. Diamond.]

Clause, as amended, ordered to stand part of the Bill.

Clause 3.—(PAYMENTS TO CERTAIN PUBLIC BODIES.)

Mr. R. Chichester-Clark: I beg to move Amendment No. 68, in page 4, line 26, at the end to insert:
Provided that no such payment shall be made to any employer to whom this section applies in respect of any person normally employed wholly or substantially in building operations or works of engineering construction.

The Chairman: I think that it would be for the convenience of the Committee if, with that Amendment, we discussed also the following: No. 354, in line 26, at end insert:
Provided that the payment which may be made by the designated Minister may not exceed the payment which would have been made if the employer had qualified for a payment within section 1 or section 2 of this Act.
No. 258, in line 38, at end add:
(5) Notwithstanding any of the provisions of this section the repayment payable in respect of employees of nationalised industries shall not exceed that payable for employees engaged on competitive work in private industry.
No. 74, in Clause 4, page 5, line 32, at end add:
Provided that no such payment shall be made to any employer to whom this section applies in respect of any person employed wholly or substantially in activities falling under the minimum list heading in the Standard Industrial Classification, namely, Order XVII heading 500 (which relates to Construction).
No. 179, in line 32, at end add:
Provided that no such payment shall be made to any employer to whom this section applies in respect of any person employed wholly or substantially in activities concerned with the maintenance or repair of land or buildings.
No. 289, in line 32, at end insert:
Provided that no such payment shall be made to any employer to whom this section applies in respect of any person employed wholly or substantially in activities concerned with the provision of meals, refreshments and hotel accommodation.

Mr. Chichester-Clark: Most of the Amendments in this group deal with

direct labour contract departments of public and local authorities, and I intend to confine my remarks, in the main, to this, although I understand that my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) may seek to say something about some of the others.
I begin by emphasising what I said on 19th May, that we on this side of the Committee are not opposed to direct labour in certain sectors. What we are opposed to is any unfair advantages for direct labour, whether on its maintenance or new construction side. We hold this view because of the lower output statistics for employees of direct labour departments against those for employees of private contractors which we discussed on 19th May, and on many occasions since then.
I imagine that to dilate on that at this stage would incur your displeasure, Sir Eric, and would be out of order, but I hope for an early opportunity to come back to this subject, especially in view of the question-begging speech of the Joint Parliamentary Secretary to the Ministry of Housing and Local Government on the Adjournment debate in the early hours of last Tuesday morning, initiated by my hon. Friend the Member for Sutton and Cheam (Mr. Sharples). On that occasion I was denied the opportunity of intervening.
We believe that direct labour departments should be exposed to the check of competition in the proper way, as when the one in three rule operates. We believe, too, that they should be on the same basis of taxation as private contractors in all their spheres of activity. This is a fair position, and within that compass we believe that direct labour departments can do useful work without causing harm or ruining the ratepayers.
As drafted, the Bill empowers the Minister to refund the Selective Employment Tax to the authorities mentioned in Clause 3 in respect of the operatives employed in their works departments, and to refund, or even give a premium, in respect of Clause 4 authorities. I think that I have the position correct there.
However, since the Second Reading of the Bill the Minister of Housing and Local Government has made a statement in which his intentions become a little


clearer, and any clarification would be an improvement on Clause 4(2) which seems to give the Minister power to hand out money almost like Father Christmas.
On 24th June the Minister of Housing and Local Government told the Urban District Councils Association:
 Construction workers employed by local authorities who are engaged on maintenance will be treated in the same way as other local authority employees. But an exception will be made for direct labour staffs employed on new construction whether of houses, schools, or any other new construction. They will be treated in the same way as employees of private contractors and will not rank for reimbursement.
That could be said to be a fairly major change of policy, and perhaps we might be forgiven for wondering why on a Bill which had its Second Reading in this House, it was not announced from that Dispatch Box rather than in a public speech in the north of England. On 30th June I asked the Minister where and when he had made this announcement. I was told, but I received no hint of apology for the fact that he did not make the announcement in the House, where it ought to have been made.
The Minister's change of policy came in page 3 of a hand-out which dealt with an entirely different subject. It did not even get the heading of the hand-out and it was barely noted. To put the matter right, the Minister of Housing seems to have called in the Lobby correspondents, because news of the repayment appeared in the Sunday newspapers on 26th June as though it was a new story—a fresh Ministerial leak. Ever since then I have been trying to decide whether something went terribly wrong or whether something went terribly right with that psychological warfare. I find it difficult to know which it was.
7.30 p.m. 
Despite the Minister's lapse in this matter, we are a little wiser about Government policy in respect of local authority employees, but the position still remains dark about Clause 3 authorities. Judging by what the Minister of Labour said—or did not say—in the Second Reading debate, it looks as if the tax will be refunded in full to the works departments of such bodies as the Central Electricity Generating Board and one or two others. But the right hon. Member made no reference to these Clause 3 authorities in

his speech of 24th June, so we do not know. If he had come to the House of Commons, as would have been proper, and had given us a statement, we could have asked these questions and would not now have to waste time in doing so. 
Let us, first, deal with the direct labour departments of public bodies. Here I am bound to refer to some figures which are relevant to the question. It appears that of about 375,000 operatives in Great Britain described in Part II of the National Plan as "operatives employed by public authorities" about 215,000 are employed by local authorities and the remainder—about 160,000—by public authorities proper. 
Of those public authorities, the main direct labour employers are the Central Electricity Generating Board, the gas undertakings and the British Railways Board. Statistics concerning direct labour as a whole and direct labour work for public authorities in particular, are hard to come by, but it seems that at least 75 per cent. of such operatives are employed in maintenance work, and that the balance are engaged upon new work, such as the construction of electric pylons. 
In 1965, about 14.3 per cent. of the total construction output, at current prices, was carried out by public authorities, including local authorities, to the value of £549 million. On the basis of a 50–50 split between public proper and local authority direct building, I calculate that the output of public authority direct labour works departments in 1965 was about £250 million. Even if the tax were charged in full on new construction only, and refunded on maintenance, there would still be an output of about £190 million, and about 120,000 men engaged on work in respect of which the tax would be refunded, while private contractors were having to meet it in full. My hon. Friends and I regard that as a grossly unfair form of competition—if competition is the right word—and that is certainly the way in which the industry regards it. 
A much more serious question arises in connection with the refund in respect of local authority direct labour department operatives. The direct labour work of local authorities alone is running just under £200 million per annum, at 1958


prices. If we look carefully at Bulletins of Construction Statistics and related publications we find that it is possible to estimate that repairs and maintenance represent about 75 per cent.; housing new work, about 13 per cent., and non-housing new work, about 12 per cent. I am advised that there are sharp regional variations in the division between maintenance and new construction. I also estimate that the division of the labour force in this sphere is about 81·9 per cent. on repairs and maintenance, 7·9 per cent. on new housing work, and 8·4 per cent. on non-housing new work. 
In short, of the 215,000 or so local authority operatives, 72 per cent.—or about 176,000—will not bear this tax. So we are talking of an annual refund of millions of pounds—perhaps about £10 million in a year—in respect of maintenance operatives, while contractors will have to pay the tax in full. 
Some say that that is a small price, and some have even argued that the figures are so small that it is difficult to see what contractors are worrying about. My hon. Friends and I totally reject that view. We also totally reject the attitude which one builder told me, "appears to be an article of faith in the Ministry of Housing ", that local authority maintenance work is not in competition with private contractors. 
The Minister of Housing went on television recently—his television appearances appear to become more and more frequent as time goes on, and housing figures slump—and said that he had ruled that where labour departments were in direct competition with private enterprise they were
 to be put on a par in the Selective Employment Tax. Where there is no direct competition, they should not '.
The obvious inference was that competition did not take place in the maintenance sector. We must obviously reject that argument, just as the construction industry has already rejected it. One builder after another has told me that he regards the right hon. Gentleman's so-called concession as of so little value as to be barely worth discussing. 
I wish that I could say that we are grateful for small mercies, if that is

the way in which to describe the position, but it would be difficult for anyone to believe that if he had heard the speech of Mr. Pearson, the President of the N.F.B.T.E. when he opened the recent N.F.B.T.E. conference on 28th June. He completely dismissed the right hon. Gentleman's argument about no competition, and said:
 We believe that Mr. Crossman has taken as illogical decision in exempting direct labour personnel engaged on maintenance work. This decision has implications which constitute a savage blow to the thousands of small building firms who normally rely on local authority maintenance work for a large part of their turnover. They will now be placed at a financial disadvantage in tendering and, clearly, there will now not be that competition on equal terms with private enterprise which the Minister hmself regards as right in principle'.
Could there be a clearer statement on behalf of the industry than that, with its reference to "a savage blow", "thousands of small builders", and "a large part of their turnover"? In all seriousness, the Minister, through his hon. Friend, should take this opportunity to think again, and he should think again pretty quickly. For one thing he will be meeting the builders in the very near future. The date previously fixed was deferred, incidentally, showing fairly clearly that on the right hon. Gentleman's original date he had no knowledge whatsoever what the Prime Minister was going to say yesterday. So much for carefully prepared packages. He should think again before that meeting. 
The other argument that the right hon. Gentleman has put forward at different times is that he could not apply the tax to direct labour maintenance only, for administrative reasons. Mr. Pearson says that when he told the Minister about the industry's attitude to the refund of S.E.T.
 Mr. Crossman said that there were administrative difficulties in the way of applying the tax to direct labour maintenance and I told him they must be overcome because the exemption of maintenance was most unfair to private firms and would be another factor contributing to the lack of confidence among smaller building firms that he says he is anxious to remove.
He has said that, and we hope that we shall see him set out on that course before long. No administrative problems of this kind ought to stand in the way of the proper treatment of small builders who, beyond anyone else, need an injection of confidence at this moment. 
I would have thought that the complications would come in trying to exempt maintenance from the repayment provisions rather than vice versa. Local Government experts will tell us that calculating which operatives were engaged upon maintenance and which upon new construction would be difficult. Anyone who studies reports of Question time in the Greater London Council will see that this is borne out by the questions, and the answers given to them. That task would be extremely difficult to undertake, and could be done only on a rough and ready basis. The experts had hoped that local authorities would be permitted to work out their numbers of operatives at least on a monthly basis before advising the Ministry of their tax liability. But they now fear that they will be asked for calculations on a weekly basis and that they will have to certify their numbers based on the number of operatives on the roll on any Monday morning. 
It seems to be obvious that a man may be engaged—this figure also emerged from the Greater London Council question and answer period—on maintenance one day and on new construction the next. I suspect that, in the end, the Government will simply have to ask local authorities to produce what one might call "vaguely accurate" figures and rely on checks by district auditors. It would be much simpler if all direct work operatives paid the tax in full. That would be much fairer. 
I have already set out my attitude to direct labour. Of course, the whole situation was changed by the issue of Circular 50/65 on 16th November last year. My right hon. and learned Friend the Member for Hexham (Mr. Rippon) and I and many of my hon. Friends expressed ourselves in the House and outside to the effect that this circular was a gross example of unfair competition. That is the way in which I still regard it. It has contributed considerably to the serious loss of confidence among builders Surely by now the right hon. Gentleman has discovered that. Now, on top of that, comes this tax. 
I believe that the Minister must relent a great deal further. He knows that his housing programme—even he must acknowledge that certain parts are in a mess—is in a considerable predicament because of the loss of confidence. The

payment of this tax in full by direct labour departments would go a little way towards restoring that confidence. It might not be much, but it would be something and it would also held the Chancellor to withhold some more revenue from the S.E.T.; not many of us would complain about that. 
After yesterday's statement by the Prime Minister, I should have thought that the Government could ill-afford to hand out revenue in one of the few areas where such a concession will do harm rather than good. The Government's timetable has prevented us from moving certain other Amendments which we wished to move, so as to draw attention to the general discontent through which the building and construction industry is moving, but this one goes nearly to the heart of confidence in that industry. 
The Minister is to have this August meeting with the builders. If he does not want to go to that meeting naked or without a shred of credit and, much more important, if he wants to retrieve his housing programme, which is now faced with total collapse, he had better cover his tracks and accept the Amendment either in fact or in principle. If he does, he will take a real step towards restoring confidence.

Mr. H. P. G. Channon: My hon. Friend the Member for Londonderry (Mr. Chichester-Clark) made an unanswerable case for Amendment No. 68. We are discussing a number of other Amendments with it and it is that I should like to talk about.
One of our major criticisms of the Selective Employment Tax is its inequity. It is not only a bad tax, but an unfair tax. Clauses 3 and 4 and the Amendments to them are directly relevant to this point. They are the Clauses which authorise the repayment of the tax to certain public bodies and local authorities. This power should be exercised with great care so as not to prejudice private people who may have been caught up in what may turn out to be the unfair workings of the tax.
Something worth attention is the point raised by the Roller Owners Association. The right hon. Gentleman will be aware that the association is extremely perturbed since its members are mostly engaged in the hiring out of road rollers and other plant, they have substantial


repair and maintenance sections, and they undertake the bulk of their work for local authorities, which also own and operate rollers. In a letter to his right hon. Friend, the association said:
 It would seem to us illogical for the authorities to obtain a refund of the tax for the drivers they employ whilst our members must bear the full tax on their drivers.
This is just one example of how the tax may affect an industry unfairly. I hope that the right hon. Gentleman will deal with this point.
I hope that he will also deal with the important point about the competition which many people will face from the nationalised industries. I refer him, in particular, to the electrical installation contractors, who are regarded, for the purposes of the tax, as part of the construction industry. Hon. Members will have had a vast amount of correspondence from people who are badly hit by the tax because of the wording in Clause 3. I understand that it is the Government's intention that nationalised industries should not receive refund of the tax for establishments comparable to private industries which are not entitled to a refund. 
7.45 p.m. 
I understand that that is the general principle which governs the Government's intentions, although their execution of it has not matched up. Therefore, in dealing with the problem of the private electrical contractors, we must go back to the Electricity Act, 1947. I would remind the Committee of the agreement reached at that time, and of the summary of principles governing the conduct of electrical contracting and retailing which was accepted by the area boards and the Electrical Contractors' Association. One was:
 In general, trading activities will be conducted on fair and unsubsidised commercial lines.
That has been the basis of the competition in those years between the electricity boards and the private electrical contractors. 
I hope that when we consider what is to happen in the operation of this Act, these will still be the principles which govern it. It would be most unfair for them to be abrogated for no reason purely because the Government have introduced a new tax without thinking out the con-

sequences. I am certain that when they introduced the tax they had no intention of deliberately setting out to penalise private electrical contractors—[An HON. MEMBER: "I am sure they did."] My hon. Friend may be right, although I hope that he is not. 
If they did not, it is a question of bad judgment rather than of bad faith. If it is, I hope that the right hon. Gentleman will be able to clear up the anomalies. He will be aware that, under the Electricity Act, 1947, private electrical contractors are entitled to undertake this form of electrical contracting. They are entitled to sell fittings and appliances by retail. The electricity boards are also entitled to sell fittings and appliances by retail. They are thus in direct commercial competition with private enterprise. 
Nevertheless, it is clear, from Clause 3, that the nationalised electricity industry will obtain a refund and private contractors will not. In this case, private contractors may be driven out of business by the Selective Employment Tax. They will have no way to recoup their funds. The profit margins are already extremely small in this industry. They are faced with very tight competition from the nationalised industries. I do not complain about that, but I do complain about the fact that this competition will now become unfair. I hope that the Government will seriously consider that. 
It would be a breach of the original agreement and contrary to the intentions of the Government if, as a result of S.E.T., there occurred, instead of economy of labour in the public electricity supply industry, an encouragement to employ more labour in an industry in which, I believe, the Chancellor wants to save labour. I therefore hope that the Chief Secretary will say what the position will be for the private electrical contractor and how he will be able to compete with the extra handicap which this tax will place on him. 
My hon. Friend the Member for Londonderry pointed out that one of the Amendments we are discussing deals with the effect of Clause 4 on public, as against local, authorities, particularly from the point of view of direct labour. My hon. Friend gave some figures indicating the number of operatives employed, not by local authorities but by other public


bodies such as British Rail, gas undertakings and the Central Electricity Generating Board. I hope that the principles which have governed, or which I have understood have governed, the introduction of S.E.T.—that competition should not be unfair—will be repeated for public bodies as well as for local authorities. 
Although we have had a partial concession for direct labour employed by local authorities, nothing has been given to public boards. I am delighted with the small concession given so far by the Minister of Housing and Local Government, although I regret that we have not had an opportunity to question him in Parliament. There will be no refund in respect of those employed in direct labour on new construction, but I submit that if they are engaged on maintenance work they will be severely affected. The Government have given the clear impression that the only reason why they will not extend this concession to direct labour engaged on maintenance work is for administrative reasons. 
When the Minister of Labour introduced the Bill he admitted that it would be unfair in its operation, that we would have to see how it worked, and that we would have to iron out some of its roughness. He went on to say that he hoped that by this time next year it would be less unfair. I submit that it is already known that there will be unfair competition and that only for administrative reasons has this injustice not been sorted out. Before introducing S.E.T. the Government should have considered the administration of the tax more fully. They should certainly now explain why they are not prepared to make this further concession.

Mr. A. P. Costain: My hon. Friend will have noted that although the Minister said that there will be this concession, the Bill does not say so.

Mr. Channon: I hope that my hon. Friend will develop that point if he has a chance to speak.
Perhaps the Chief Secretary will explain how the concession will be implemented in the operation of the Bill. A host of difficulties have presented themselves in our consideration of the implementation of S.E.T., and particularly its application

to the building and construction industries. We have had little chance to debate these anomalies. Indeed, we have had only 10 minutes in which to discuss the whole building industry. I am sure that the Chief Secretary regrets this and that before imposing a tax of this magnitude he would have liked to have justified it to the Committee.
Time does not allow me to go into the many other anomalies that exist. There are a series of problems connected with fixed-price contracts. Is there really to be some concession for private contractors who have fixed-price contracts with nationalised industries? I do not know whether the Government have made a statement to that effect. What sort of rates of concession will apply to contractors who have fixed-price contracts with Government Departments and local authorities? The Chancellor gave us to understand that the money will not be totally recouped. What will be the principles guiding recoupment? These questions are directly relevant to the Clause and we are entitled to some straight answers.
Innumerable examples have been given to show that the Bill is unfair. It is the duty of the Government, these anomalies having been shown up, to remedy these shortcomings and to ensure that the tax is not only fair but is seen as one charge on the building industry and as part of a package of extra matters about which we heard yesterday from the Prime Minister. Blow after blow has been struck on the building and construction industries, although we have been told in the past by the Government that the one thing they would never do would be to make the construction industries a regulator when the economy was in difficulty. So incompetent—

The Minister of Public Building and Works (Mr. Reginald Prentice): Before the hon. Gentleman continues, I suggest that any one who makes a fair analysis of yesterday's statement will say that it was a severe statement which involves sacrifices being made across the board, including sacrifices in the building and construction industries. However, it would not be fair to say, if one judges the package as a whole, that those industries are having to bear a disproportionate share of that. To say that is


leaving out of account all the other things in the package.

Mr. Channon: That is a matter of opinion. The right hon. Gentleman is entitled to express his view. We cannot debate the matter now without being out of order. What happened yesterday, even though it may be necessary in the national interest, represented a direct refutation of everything the right hon. Gentleman and his predecessor said to the building and construction industries, as well as being a refutation of what the President of the Board of Trade said when introducing the Bill to control office building.

Mr. Chichester-Clark: My hon. Friend will also no doubt recall the statements made by hon. and right hon. Gentlemen opposite to the effect that the building industry would never be used as an economic regulator.

Mr. Channon: Yes, although if I develop this theme I shall find myself out of order.

Mr. Prentice: Statements have been made to the effect that the construction industries would not be singled out as economic regulators. I claim that the statement made yesterday by my right hon. Friend the Prime Minister confirmed those statements. It has never been said that the building or any other industry could be contracted out of the economic situation of the nation.

Mr. Channon: We will have two days in which to discuss these important economic measures next week.
In view of the extremely far-reaching nature of the measures announced by the Prime Minister yesterday, and the widespread effect of them on the building and construction industries, it is all the more important that S.E.T. is realised for what it is—a tax which represents yet another burden on the building industry. It should be seen to be fair and the anomalies and injusticies which have been proven to exist should be ironed out before it is imposed. That is why the Government have a duty not to allow S.E.T. to be imposed until these anomalies have been cured. If they do not accept that duty great harm will be done, and that is why I support the Amendment.

Mr. Costain: In accordance with the custom of the Committee, I will at the outset declare my interest and say that I am connected with the building industry.
My hon. Friend the Member for Londonderry (Mr. Chichester-Clark) and my hon. Friend the Member for Southend, West (Mr. Channon) have so adequately dealt with the problems of the building industry from the point of view of S.E.T. that there is no need for me unduly to develop their arguments further.
Since the General Election the Labour Government have introduced a number of Measures which have been nasty doses of medicine. Each one has contained a provision giving the Government special dictatorial powers to completely take over should the occasion arise. And when the right hon. Gentleman the Minister of Public Building and Works said, a few moments ago, that only part of the building industry would be sacrificed, he must realise why we are expressing fears on this subject. It is because of these fears that I tabled an Amendment, which, I understand, I may discuss. I fear that, once the economy gets worse, there will be a tendency to throw something more to satisfy the Government's Left-wing wolves—and private enterprise is a very tasty morsel when it comes to appeasing those who have not yet been satisfied. 
8.0 p.m. 
My Amendment is straightforward and I submit that the Government's attitude towards it will show quite clearly whether their intentions are honourably designed to follow what the Minister of Labour said on Second Reading, or whether this is another catch-clause of a party that got into power on a manifesto that said one thing and does another. If the latter is the case, we must expect the same thing to happen in legislation unless we on this side watch very carefully. 
In the Second Reading debate on 23rd June, the Minister of Labour said:
 Those parts of the nationalised industries which are engaged in manufacturing activities directly comparable to those undertaken in the private sector are listed in Part III of the First Schedule. These will attract premiums. Those parts which are engaged in service activities directly comparable to the private sector are listed in Part II of the First Schedule. These


will not attract any refund."—[OFFICIAL REPORT, 23rd June, 1966; Vol. 730, c. 938.]
That statement was taken by the House to mean that private enterprise and the nationalised industries would be equally treated, but when we study this in Committee we find quite another situation. In Clause 3, we get this extraordinary statement:
…that Minister with the consent of the Treasury may determine, a payment of an amount appearing to that Minister to correspond ….
to certain things following. There is no catch in my Amendment. All I seek to add is:
 Provided that the payment which may be made by the designated Minister may not exceed the payment which would have been made ir the employer had qualified for a payment within section 1 or section 2 of this Act.
That is what the Bill does not say. 
If anyone has any doubts about this, let me go further. In any legislation related to the nationalised industries the Minister is ultimately the referee. What we have to do is to see that the rules are properly drawn, and that they cannot be altered by the Minister, in innocence or otherwise. 
Part I of Schedule 1 makes interesting reading. It sets out those industries to which this Clause applies. Among them we find the National Coal Board—that is thet normal sort of industry, and the Electricity Council. My hon. Friend the Member for Southend, West (Mr. Channon) has made the point that that is a hybrid organisation, but I seek to amend Clause 3 because it gives such organisations greater power than they would have if they were private industries. I will not weary the Committee with anything further from Part I—it is all the same all the way down, and anyone can see the point quite clearly.
Par III deals with organisations that get a premium, which we are asked to empower the Minister to give them. It is headed:
 Parts of undertakings qualifying for premium ".
The first is
 The Brickworks Executive of the National Coal Bcard.
I took the trouble to visit the Library to find out just what the terms of reference of the Brickworks Executive are. They are:

 To develop and improve the Board's manufacture, supplies and sales of bricks "—
That is manufacture—clay work—and I have no complaint there. It has also
 …to make best use of materials and facilities possessed by Board and services of other Departments of the Board, and to foster technical and other research in this field.
Sales are also included, but the fact is that a manufacturer with a sales office in another area could not get a premium. 
This is a wonderful list. The next organisation mentioned is
 The Coal Products Division of the National Coal Board.
Then we have:
 The London Transport Railway Overhaul Workshops at Acton.
No private enterprise can get a premium on an overhaul workshop. We go from bad to worse. The Minister is taking more power over the
 Workshops of the British Waterways Board which are wholly or mainly engaged in manufacturing or repairing waterway equipment.
 The Engineering and Maintenance Division of the British Overseas Airways Corporation.
If those were private enterprise they would not get a premium, but we are here asked to give the Minister a right to give these little morsels out as he thinks fit. 
All my Amendment seeks is to try to persuade the Minister to tell the Committee what is meant. If the Minister argues that my Amendment is wrong because of a slight technical error—and a Government always have the last word on that matter—I would willingly say, let them put down an Amendment on Report. We should have a right to ask for fair play between private enterprise and the nationalised industries and direct labour. They should compete as equals. 
One of the factors of our present economic troubles is lack of confidence. How can private enterprise develop new industries in new areas if there is always the threat that the nationalised industries and local authority direct labour will get a special bonus premium because, as long as the present Government are in power, those bodies happen to be the "favourite kids", and get that little bit extra in a competitive world that helps them to compete unfairly? This Amendment seeks fair play, and I suggest that if the Minister does not accept it he does not intend to allow fair play in the future.

Mr. R. W. Elliott: Bearing in mind the rigours of the Guillotine, I will not expand at any great length on many of the points I wished to make, as these have been excellently covered by my hon. Friend the Member for Southend, West (Mr. Channon), but I should like, in emphasising a few of the points he made, to refer to Amendment No. 258, which refers to the privileged position in which the nationalised industries are being put as a result of what is called in many of the letters that a number of us have received "this iniquitous Measure".
In particular, I would refer again to the position of electrical contractors. As he always is, my hon. Friend the Member for Southend, West was very generous—he has a generous spirit in suggesting that the Government had, in innocence, through the terms of this Bill, put the nationalised electricity industry in a privileged position over individual electrical contractors. I am unable to share my hon. Friend's generous out-look—

Mr. Channon: In this debate, my hon. Friend and I will find out who is right. If the Government give way, I shall be right; if not, he will be right.

Mr. Elliott: One comfort that those of us living in these troubled economic times have is the knowledge that members of the Government are also Members of Parliament. In their constituencies, there are high streets, and in those high streets there are premises occupied by electrical contractors. If members of the Government, particularly those responsible for the promotion of this Bill and its passage through the House, have not been receiving letters from the electrical contractors in the high streets, their experience has been different from those of us on this side of the Committee. We have received many letters from individual businessmen and from the ranks of private enterprise objecting to the fantastic preference that has been given to the nationalised industries. If this Clause is not designed to drive small businessmen out of existence—which seems to be the aim of the Government—I do not know what it does.
No one objects to the boards being in competition with private enterprise. As my hon. Friend said, no one objects

to local authority direct labour being in fair competition, but it is out of all proportion that employees of nationalised industries should receive the payment for installing plants while small businessmen are not to receive the repayment The small businessman is to have hi's tied hands tied behind his back by this Measure. We can whole-heartedly condemn it. We suspect the Government very strongly indeed of desiring to give preference to nationalised concerns and wishing to drive the small businessman out of business.

Mr. R. B. Cant: With some reluctance I follow the precedent of yesterday and oppose this Clause in detail while supporting it in principle. I do so for different reasons. Like hon. Members opposite, I have had more correspondence on Selective Employment Tax than on anything else. A large proportion of it has come from electrical contractors and the Co-operative movement.
The Government, by departing from the White Paper on the Selective Employment Tax, have introduced an element of injustice. They have introduced an element of discrimination in favour of nationalised industries. I am thinking particularly of electricity showrooms. I am opposed to this, not because I believe it will drive out the small businessman—although, obviously, it will have an effect on him—but because I think it extremely undesirable, speaking as a Socialist, from the point of view of the electricity undertakings themselves.
The electricity undertakings are extremely progressive and efficient. The gas and electricity industries have done a very great deal to promote the technical advance of their industries and they have been responsible for many administrative developments. I do not like to think that they are in a sense to be subjected to the indignity of this sort of treatment which offers them this sort of subsidy. As a Socialist, I should like to think that these industries can stand on their own commercial feet without fear of favour.
In Schedule 1(2) the retailing activities of the National Coal Board are excepted when the depots are outside the curtilage of any colliery and wholly or mainly engaged in the retail domestic trade. Speaking rather parochially, I think that in some


areas, certainly in North Staffordshire, we have a situation in which the depots are almost exclusively out of the curtilage of the National Coal Board.
I confess that I am not quite clear about die situation in which the N.C.B. handles wholesale sales to other distributors a very high proportion of which are for domestic use and whether this creates a situation in which the National Coal Board depots are, in the meaning of the Schedule,
 wholly or mainly engaged in supplying coal …to domestic consumers 
both directly and indirectly. Quite obviously, in an area such as North Staffordshire the Coal Board would be exempt and the Co-operative movement and private retailers will be at a disadvantage. I make those two points and hope that I shall have a reply to them.

8.15 p.m.

Sir Harmar Nicholls: I expected that when we reached this group of Amendments we would have some keen and informative argument from my hon. Friends, and we certainly have had it. What has disturbed me was the intervention of the Minister of Public Building and Works during the speech by my hon. Friend the Member for Southend, West (Mr. Channon).
I had the honour to serve in that Ministry for some time and I looked upon the right hon. Gentleman who is now Minister as the right type. He has vigour and an independent outlook. I felt that, if we had to have a Socialist Government, in that Department he would be as good a Minister as one could find, but he disturbed me tonight. What we expect from a Minister of Public Building and Works is that he should look after the interests of the building industry. We expect him to look at the great problems of the industry and to be prepared to argue within Treasury committees on behalf of the industry.
I could have understood the sort of intervention he made if it had come from a Treasury Minister. I could have understood it coming from the right hon. Gentleman who will reply to this debate. I could have understood his wanting to slide over the obviously well-based criticisms of my hon. Friends, but I could not understand it coming from the Minister of Public Building and Works,

and I was disturbed that he should have done it. This is an occasion on which his silence would have been eloquent and helpful to the building industry, but his intervention showed that he is complacent and does not feel that the industry has much at which to grumble.
The right hon. Gentleman had to admit that the industry is having its fair share of restrictions, but he suggested that it had no more than its fair share. I should have expected him to know, more than anyone, that in the whole package squeeze the building industry and industries which go with it have more than their fair share. They have had a rough road. If we look at the loose wording of the Bill we find that not only are they to have a rough road, but they are in a hazy position and cannot see their way through. I should not have minded his silence if that meant he was battling for the industry, but now he seems to have put himself into the position of suggesting that the industry is all right. I hope that I have misjudged his intervention—

Mr. Prentice: Misinterpreted it.

Sir Harmar Nicholls: I am glad to know from that intervention that the Minister is battling within the Government to try to get better treatment for the industry. I give up the Minister of Housing and Local Government. He gets so excited and arrogant that I do not think he is a good representative of this great industry, but I am disturbed about the Minister of Public Building and Works.
I do not think that there is any doubt that these Amendments—certainly two of them—should be accepted by the Government, if only to clear up the present hazy situation. I support particularly Amendment No. 354, in the name of my hon. Friend the Member for Folkestone and Hythe (Mr. Costain). If the Government meant what was said in their name on Second Reading they must accept these words, because the words are merely confirming in an unequivocal way what was then said. There cannot be much doubt that that Amendment should be accepted.
The hon. Member for Stoke-on-Trent, Central (Mr. Cant) was eloquent in support of the point of view of electrical contractors. It was not easy for the hon.


Gentleman to say what he said, because he had to be critical of the Government he supports. He is not an old Member of the House, although I can see that he will be a useful one. It is not easy for one to criticise one's own Government, particularly when they are in such trouble. In face of all these troubles, an hon. Member does not want to be labelled as a "Brown man".
However, the hon. Gentleman took the risk, because he knew from his own postbag and from his observations in North Staffordshire—the heart of England—that the Government's course of action is wrong. He knew that private enterprise electrical contractors will be in an unfair position when competing with nationalised industries.
The hon. Gentleman said that he would like to feel that Socialist-run industries did not need this sort of help. I assure him that they do need it they would not go far without it. That is why the Treasury Bench is giving it to them. In this instance, fair play should supersede doctrinaire views. I hope that the Treasury Bench will, when considering the Amendment, make it clear that it is not their intention to provide that private enterprise electrical contractors should be in this invidious position and that they will not allow such a provision to remain in the Bill.
The brick industry is another industry which will suffer as a consequence of this haziness and disturbance. My first job when I was at the Ministry of Works was to go round almost all the brick works, including some in North Staffordshire, urging them to invest a lot of money in the industry so that kilns could be built and there could be an upsurge in the output of bricks. I told them that this was essential if they were to meet the needs being made on them by the Government at that time. The records of the Ministry will show that on every occasion those concerned gave impressive figures to show that the capital investment which would be needed to build up the supplies of bricks which we said that the nation needed would put them at great risk, unless we could guarantee outlets for their products.
Those concerned in the brick industry said that they had been faced with stop-

go so often. I believe that it was the brick industry which first made use of the phrase "stop-go". The industry had been encouraged to build up. Then it was faced with a slump and so it was left with all its capital invested. Because of Government action—it was not always a Labour Government—from 1947 onwards, clamps were imposed which affected the production of bricks and the industry was not able to get a return on the money which had been invested in new kilns, money on which, if obtained on bank overdraft, heavy interest payments had to be made.
The industry responded to the appeal that the then Government made and invested a lot of money, perhaps more money than the judgment of those concerned would have led them to make. They did this to ensure us the supply of bricks which got us through that period when so many houses, hospitals and schools were built.
Now the industry is back in its old unfortunate position. The large amount of money which has been expended is now reflected in the bricks piling up in the yards. The industry has to contemplate getting rid of some of its work-people. The kilns are standing idle. This is the result of the clamp which has again been imposed on the industry. Because of the economic problems now facing us, part of the restriction may be necessary. I do not agree or disagree with the statement made yesterday that we are in a mess and that we must all work hard to get out of it. However, it is not necessary for the position to be left hazy and unsettled for the building industry.
I plead with the Government to look favourably on this group of Amendments which, if they do nothing else, state in clear terms what the Government have already said they want to do and in every instance bring into being the outlook expressed by the Minister of Public Building and Works. I hope that these final words of mine will reach his heart. I should like to feel, as I did feel before I heard the right hon. Gentleman intervene earlier tonight, that the building industry had, in the new Minister of Public Building and Works, a man who will fight hard on its behalf and who will ensure that the miserable Treasury does not


once again get away with imposing these restrictions on it.
I am on the side of the Minister of Public Building and Works, especially if he lives up to the picture I have of him. My picture of the Treasury is nothing to do with the picture I have of the right hon. Gentleman, but he seems to enjoy doing the dirty work which the Treasury so often foists on him.

Mrs. Jill Knight: I rise to speak on behalf of the people of whom we have heard quite a lot today, namely, private enterprise electrical contractors. I do so on a slightly different ground, speaking as a consumer. All of us know full well that one reason why area electricity boards have competitive prices is that they have had to face the competition of small private enterprise electrical contractors. From the consumer's point of view, this is an excellent thing, because it enables us to obtain a service much more cheaply than it would otherwise be. Therefore, anything which would operate to end this state of affairs would be against the consumer's interest and would be bad.
I want to speak on behalf of these people, partly because I have tabled an Amendment on this subject and partly because I conceive it to be my duty to represent here the grievances and upsets of those who sent me here. One letter I have received bears quotation, because it sums up the grievance that these people feel they have:
 With reference to the ….
Selective Employment Payments Bill, says this employer, who is in a very small way of business—
 we would urge you to demand that the Bill should be for Selective Employment and not for selected employers.
In our case, we would have to pay the tax for men sent to a factory to carry out installation and maintenance work. The Electricity Board will be entitled to a refund for the same work. Men on the payroll of a factory doing the same job would not only get a refund but also a rebate.
Our main concern, naturally, is the unfair advantage given to the electricity boards" by the Bill.
These people feel—it is natural that they should feel this way—that they are being forced to pay a tax to help their

competitors against themselves. It is no wonder that they feel a very deep grievance.
I hope that the Government will not use a false argument in replying to the Amendment. One argument likely to be used against the proposal that area electricity boards should not receive a refund in respect of their contracting and retailing staff is that it is not possible for boards easily to discriminate against employees engaged on retailing and contracting and on other work.
I hope that we shall hear no nonsense of this sort. Each electricity board produces annual accounts which are published by the Stationery Office and which, inter cilia, give specific figures in respect of their contracting and retailing activities.
There is no argument about this. If it is possible for an electricity board to produce accounts showing the profitability of its contracting and retailing activities, the contracting and retailing staff are already separated and recorded as such. Surely no difficulty could arise in ensuring that such staff did not attract a refund of the tax. Surely arguments that are reasonable must be accepted and it must be recognised that private enterprise firms of electrical contractors have a real grievance, as do the consumers. In putting this viewpoint to the Government, I beg them to consider it very carefully.

8.30 p.m.

Mr. F. V. Corfield: In intervening I have no intention of bringing the debate to an end but I want briefly to add to the arguments so ably deployed by my hon. Friends the Members for Southend, West (Mr. Channon), Newcastle-upon-Tyne, North (Mr. R. W. Elliott), and Birmingham, Edgbaston (Mrs. Knight) and the hon. Member for Stoke-on-Trent, Central (Mr. Cant) about the position of the electrical contracting industry vis-à-vis the nationalised electricity boards. Interested as I was in the speech of my hon. Friend the Member for Edgbaston, I do not share her belief that reasonable arguments will be accepted by the Government. This has come over me in the last few nights and I am no longer optimistic.
Time does not allow us to deploy the whole argument. The tax has been calculated to add between 9 per cent. and 10 per cent. to the labour element in the contracting industry. If the Chief Secretary doubts these figures I am willing to give him the calculations on which they are based. We must presume that even this Government recognise that this gives an enormous advantage to the nationalised electricity boards and we hope that they recognise it as a grossly unfair advantage—unless, of course, they contend, on the eve of the Iron and Steel Bill, that the nationalised industries are inherently so inefficient that private enterprise can catch up on a 9 per cent. lead.
I understand that the private electrical contracting industry employs about 36,000 electricians and about 20,000 apprentices and installs plant, appliances, etc., to the value of about £150 million per annum. It is obvious that this work offers very little scope for automation or mechanisation. Similar conditions apply to the selling side of the board's activities to showrooms and so on.
As my hon. Friend the Member for Southend, West pointed out, the irony lies in the fact that the Socialist Minister at the time of the nationalisation of the electricity supply industry lent his name to the agreement drawn up between the Electrical Contractors' Association and Lord Citrine, the first Chairman of the Central Electricity Authority, as to the clear trading terms. It is clear that this agreement, like so many other Socialist promises, is to be torn up and thrown out of the window for some doctrinaire administrative convenience.
It is also clear, as my hon. Friend the Member for Edgbaston said, that there is no difficulty on the part of the electricity boards in identifying the people employed on this side of their activities. As she rightly said, their accounts contain separate accounts of the selling and contracting activities so that there is no difficulty in identifying this branch of their operations. But the agreement is to be torn up, I understand, not—and this is to their credit —because the nationalised boards particularly want it done or because they are unable to identify the labour concerned but solely because they are in competition with the nationalised gas in-

dustry which does not keep these separate accounts.
Thus we have the absurd position of a Government dedicated to nationalisation of the heights of the economy unable apparently to sort out the systems followed by the gas and electricity industries, preferring to leave this grossly unjust anomaly vis-à-vis the private enterprise contracting industry.
The result is that we have this gross discrimination, discrimination which is unfair from a Government which is always prattling about social justice until that has become an absolutely meaningless phrase. It is discrimination which condones a thoroughly inefficient form of accounting and an inability by the Gas Council and the gas boards to differentiate their labour. It is a discrimination which yet further, if that is possible, discredits the integrity of the Socialist Ministers of the past.
I challenge the Chief Secretary to dissociate himself from this form of discrimination and to say that he will put this matter right on Report.

Mr. Diamond: I have many questions to answer and while I do not want to delay hon. Members opposite, for I know that a Guillotine is operating and they will want me to speak as rapidly as possible, I have been asked so many questions, from road rollers onwards, that if I am to reply, I shall have to take a little time. One hon. Member opposite became so excited that I was rather worried and almost felt that I must ask him to sit down and relax.
I must, firstly, say that the Government's attitude to private enterprise and public enterprise is what has been many times stated from the Dispatch Box—we have, and we are likely to have as long as any hon. Member present is alive, a mixed economy; we want it to work and we think that we know what makes the public sector work and we think that we know what makes the private sector work, and certainly hon. Members opposite would claim that; we want to give every inducement to the private sector to be enterprising and energetic and to use all the emotion and drive which hon. Members have been putting into supporting the Amendments. On that first score hon. Members opposite can relax.
Secondly—[Interruption.] The hon. Member for Gloucestershire, South (Mr. Corfield) is more capable of debating than of persuading; it is not necessary for him to offer insults every time he rises to speak, or even when he is sitting down. I hope to deal with the debate and to do so fairly and I shall certainly not be put off by any words which I regard as less than praiseworthy. I want to deal with the arguments on their merits.
The second point is the distinction between private enterprise and nationalised industries in the application of the tax. We are anxious, for the very good reasons given by my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant)—and I am glad that he gave them—that, so far as is consistent with sensible administration and organisation, there shall be fair competition. We do not take the view that the nationalised industries have to be coddled—quite the opposite. We give them their profit targets and we believe that they are capable of carrying out their industrial and commercial activities with the same efficiency as, or even more efficiency than, private enterprise and that they should be judged in that respect by that criterion.
I have carefully referred to commercial and industrial activities, because, of course, the nationalised industries often have their social responsibilities in addition which should be separately accounted and measured. We approach all these Amendments on the basis that we want fair play between private enterprise and nationalised industries and we are doing everything we can to encourage both the public and private aspects of the economy.
I will now deal with what the Bill provides for the nationalised industries. Perhaps I should start with the local authorities, because that is much simpler. Local authorities are to get a refund of the tax which they pay, with one major exception—directly employed local authority employees on new construction —not maintenance, but new construction.

Mr. Chichester-Clark: The right hon. Gentleman talks of a major concession, but does he not realise that he is talking about less than 10 per cent.?

Mr. Diamond: I was trying to make it simple for the Committee. I am sure

that the hon. Gentleman is fully aware of the details, but I am not quite sure if everyone else appreciated them. Local authorities are to get a refund of the tax paid, with the exception of those employed in new construction. Broadly, nationalised industries are to be dealt with on the basis of being neutral, neither getting a premium nor being net payers of the tax.
As is said in the first Schedule of the Bill there will be a premium paid in respect of those employees of nationalised industries who are employed on some ancillary activity directly competing with private industry. This is set out in Part III of the Schedule. There will be no repayment in respect of those set out in Part II of the Schedule where there is again direct competition in respect of ancillary activities with private industry, when private industry receives no rebate or premium. They are being put on exactly the same basis as private industry, wherever one can seek it out in respect of their ancillary activities, either receiving a premium or nothing as the case may be.
That is the background, and I will now apply the general principles to the detailed questions put to me. On the question of construction there is the distinction between new work and maintenance work. I gather that there is no complaint about unfair competition between local authorities and private contractors on new work. If there is the Committee should bear in mind the words of my right hon. Friend the Minister of Housing. I think that I have made it clear that there will be no refund in respect of local authority employees engaged on new construction.

Mr. Chichester-Clark: The important question is what proportion is the new work of the whole?

Mr. Diamond: It does not matter what proportion it is. We are talking about whether competition is fair or unfair. Building work falls into two accepted categories, new work and maintenance.

Mr. Chichester-Clark: And what proportion is new work of the whole?

Mr. Diamond: I do not know what proportion new work is of the whole and I do not think I ought to know. It is totally irrelevant and I would not dream


of asking the Box for it. It does not matter whether it is 1 per cent. or 91 per cent. On all new work there will be fair competition in the way that I have indicated.
Dealing with maintenance, there will not be an attempt to go into the various categories so as to divide them up between those categories of maintenance carried out by a local authority which are possibly competitive with private industry—this is a very small part of local authority maintenance—and the rest of local authority maintenance, concerned with sewerage and a host of things like that, where there is no element of competition with private enterprise. In short there is a very small area in which it might be held that the local authority maintenance work was being carried out in competition with private enterprise.
It is administratively impossible to sort out as between the men engaged on one kind of maintenance work one day and another kind of maintenance work another day. Very largely, it is not put out to tender. In that respect it is not administratively possible, and it is not relevant in terms of magnitude, that we should ask local authorities to accept the impossible task of trying to ascertain which members of their maintenance staff have been engaged for parts of a day or week in doing work which conceivably might have been held to be competitive with private enterprise. To that extent, therefore, it is a rough edge.

Mr. Costain: I want to point out how very weak the right hon. Gentleman's argument is. We have pointed out that 90 per cent. of the building work done by direct labour is maintenance work. We are talking about the livelihood of about 70,000 small builders who rely on maintenance work. The Minister is saying, "We want a special advantage over these people at 7s. 6d. a man a week when they are repairing a sewerage system". What the right hon. Gentleman said does not hold water.

8.45 p.m.

Mr. Diamond: The hon. Gentleman is wrong, and he should not get excited—[Interruption.] The hon. Gentleman was not listening. He was talking with his hon. Friend on the Front Bench. I did not want to interrupt him.

Mr. Chichester-Clark: It would not have profited me if it had been on a par with what we have had so far. The time was rapidly coming, if it were not for the Guillotine, when we should have had to ask the Minister of Public Building and Works to bail the Chief Secretary out, because he does not know what he is talking about.

Mr. Diamond: That may be. I am trying to answer the questions put to me. I am trying to demonstrate to the hon. Member for Folkestone and Hythe (Mr. Costain) that this rough edge—and I admit that it is a rough edge—is of tiny proportions. I go further: I shall be always at the hon. Gentleman's service to receive from him representations about local builders who have evidence that they are meeting unfair competition and losing their livelihood as a result.

Mr. John Brewis: Would not the right hon Gentleman agree that this is leaving the door wide open for local authorities to increase the number of men they have on maintenance work?

Mr. Diamond: Hon. Members opposite are expressing unnecessary anxiety. According to them, the whole world will turn round once this tax is put into force and small builders will be turned out of work and will go bankrupt. I assure the hon. Member for Galloway (Mr. Brewis) that there is no reason to fear anything of that kind. Small builders will be likely to be doing the same share of the work that they have done in the past. To meet their reasonable point of view we have deliberately taken steps to ensure that there is fair competition on all new construction, which is the relevant part.
I was asked about the Government's attitude to fixed-price contracts. You, Mr. Irving, were good enough to allow the matter to be raised, so perhaps you will permit me to reply to what was said as I dare say there is considerable interest in this matter.
The instructions to Government Departments which will very shortly be issued provide that in the case of Government contracts for construction works—I am not talking about term or service contracts—Departments may agree to pay up to 90 per cent. of the ascertained extra cost to the contractor resulting from his his Selective Employment Tax payments


in respect of personnel employed on the construction site only. So far as term or service contracts are concerned—that is, contracts which can be terminated at relatively short notice by either side and which are usually for building maintenance work—Departments will be authorised to pay up to 100 per cent. of the extra costs to the contractor resulting from that part of his Selective Employment fax payments which can be attributed to work on Government contracts. What I have been talking about is Government contracts, and I expect—I can go no further than that—that public enterprise and local authorities will bear in mind what the Government are doing and may well fashion their attitude on that. The question of contracts as between contractors and private customers is not a matter For the Government at all.

Mr. Channon: Will the Chief Secretary consider, if necessary, giving the nationalised industries a general direction to ensure that they do so?

Mr. Diamond: I shall of course consider, but what I shall consider is whether my right hon. Friend has any such powers. and perhaps the hon. Gentleman will consider whether he wants nationalised industries to be run on a string so that they are given orders by Ministers from day to day on what they shall do. I have explained what the Government are doing and that I assume that the nationalised industries and local authorities would take due note of what the Government thought was appropriate action in regard to the present circumstances.
I do not know whether the hon. Gentleman wants me to go into questions of steam-rollers at this hour, in view of the fact that the debate is guillotined. Perhaps it would be simpler if I wrote to the hon. Gentleman.
The situation concerning electrical contractors is not quite as the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) describes it. Here again there is a very small rough edge. [Interruption.] I am not here to deny what exists. I am here to explain how one cannot improve on the present provision. I have stated the principles to which we shall try to adhere. If anyone can suggest

methods by which we can improve the application of those principles of fair play as between private and public enterprise, we shall be only too glad to listen. We are taking powers in the Bill to vary the arrangements so as to permit that.
The majority of the work carried out by electricity undertakings is not competitive. Because it is not competitive, they do not get the same beneficial treatment that the electrical manufacturing contractors would get. For example, being a utility company, they would not get the premium in cases where they would otherwise get it. The gas and electricity manufacturing plants, which must run into hundreds of millions of £s, do not attract the premium that they would attract if they were under private enterprise because it would be manufacturing. Similarly, it is being treated broadly as a nationalised industry and is neither bearing the tax nor receiving the premium. That is the main philosophy.

Mrs. Knight: rose—

Mr. Diamond: If the hon. Lady could relax, as I have suggested that the hon. Gentleman should, we should all be so much happier.

Mr. Hector Monro: (Dumfries) rose—

Mr. Diamond: The hon. Gentleman can come in if he wants to afterwards. This is the Committee stage and I shall listen to him with interest.
The intention is neither to give nationalised industries the premium nor to charge them with the tax, and therefore one cannot start to make a direct comparison. If a direct comparison were sought, the hon. Lady would be inviting me to say that the nationalised industries that carry out major manufacturing activities should get a premium in respect of them. They would then be getting more substantial sums, which would be unfair in terms of competition, and therefore we do not propose that.
All that we propose, in terms of fair competition, is that this should be treated quite separately, as I have explained. This would give an advantage to the private electrical contractor in the sense that there is a small element, a quite tiny element, in which the private electrical contractor is competing with a nationalised industry. The electrical contractor


starts off here with a considerable advantage, if he has manufacturing plant—some have and some have not—but we disregard that, inasmuch as one cannot separate not contracting from retailing but contracting of one kind from contracting of another kind.
What the electricity undertaking is concerned with mainly in contracting is the laying of mains and that kind of thing, and this is in no sense competitive. That is the major activity. On the other very minor proportion, the work might conceivably be competitive.

Mr. Corfield: How much in a year?

Mr. Diamond: I shall give way in a minute. I do not know why everyone is so impatient. I have been asked for information and I want to give the answer. The answer is that there is a very small area in which there is competition, and, although there would be advantage to the electrical contractor because he gets the premium in certain cases and the supply company does not, it is not possible to make an exact comparison and to give that same premium to the nationalised industry, for the reasons I have explained, or to separate out the hours a particular man might spend in one day doing contracting of one kind or contracting of another kind.
For these reasons, I cannot recommend the Committee to accept the Amendments.

Mrs. Knight: We must tell the right hon. Gentleman quite frankly that that is the most blatant example of double-talk we have ever heard. We have listened most carefully to his reply, given almost with tears rolling down his face, assuring us that he wants to be absolutely fair to private enterprise as opposed to the nationalised industries.
The point seems so simple. A nationalised industry sends a team along to wire up a house. A private electrical contractor sends along a team to wire up a house. They are in direct competition, and one of them is getting an unfair advantage over the other. If the right hon. Gentleman wants it like that, we recognise that he has a majority to have it like that, but what we cannot accept is that he is sincere in what he says

at the beginning if that is how he finishes at the end.

Mr. Monro: The right hon. Gentleman has talked about a fair balance between the nationalised industries and free enterprise. It is surprising that in Schedule 1 there is no mention of the State management districts, the public ownership of hotels, restaurants and public houses, and the State brewery in Carlisle, Gretna and Ross and Cromarty. In view of the great importance of this matter to free enterprise in those districts, I should like the Chief Secretary to explain briefly why they have been omitted whereas, for example, British Transport has been included in the other part of Schedule 1.
I warmly support what my hon. Friends have said about the electrical contractor. Nothing that the right hon. Gentleman has said has alleviated our fears. I stress this particularly from the point of view of electrical contractors in Scotland, who have written to me and, I am sure, to all hon. Members who have such interests in their constituencies, expressing grave concern at the most unreasonable state of affairs now created by the Bill. I emphasise the point all the more from the Scottish point of view because we have had no time whatever to deal with our Amendments in Committee.
I hope now that after further questioning from my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) and myself, the Chief Secretary will at last tell us that he sees our points of view and will agree to our Amendment.

9.0 p.m.

Mr. David Mitchell: I am very glad that among the Amendments which we have been allowed to discuss in the limited time available it has been possible to include No. 258. Having heard the Chief Secretary's reply to the general discussion, I wonder why it is that he cannot accept the Amendment. The right hon. Gentleman said that he wanted to be fair and equal as between the nationalised industries, local authorities and private enterprise. In Amendment No. 258, we ask precisely that. To quote the Amendment, we ask that
 the repayment payable in respect of employees of nationalised industries shall not exceed that payable for employees engaged on competitive work in private industries.


That is exactly what the right hon. Gentleman said was his intention. If it is his intention, I ask him to accept the Amendment. If he refuses to accept it, we can only assume, perfectly reasonably, that this is another example of the double talk of the present Government, where one thing is said and another thing is done.
I listened attentively to the right hon. Gentleman's summing up, and I want to make two specific points. The first one concerns local authorities. As he said, the competition between local authorities and private builders is, in part, involved in new construction, and there is no complaint about that. However, the other part is concerned with decoration and maintenance, and here there is constant direct competition between local authorities and private industry. The point which I want to stress is that it is not big private industry, but the small private firm which is affected.
When dealing with maintenance and decoration, one does not find the giants of the business involved, with respect to Costain's and other great firms. One finds the small village or town builder involved in it. If my researches are right, there are about 70,000 firms of this nature. and they are the people who will be put in the position of direct unfair competition when they have to quote against a local authority which does not have the weight which they have tied round their necks of having to pay Selective Employment Tax.
That is a point which the Chief Secretary has not answered, and it is one on which I feel that the Committee ought to hear an explanation, if there is one—I suspect there is not—of how he is to give effect to the meaning of his words, "equal and fair".
My second point is to join with my hon. Friends in their argument about the nationalised industries in relation to electrical contracting and other types of industry. A good example is railway track maintenance, where there is direct competition between the railways' costings in the use of its own labour for maintenance and the bringing in of contractors to do the wok. The contractor will have to pay; the railways will not. That is a direct case of firms being put at an unfair

disadvantage where the Minister said that he intended it to be fair and equal.
The Chief Secretary talked as if, in electrical contracting, it was a non-existent problem. It so happens that I have just moved house, and I find that the electrical installation in my present house needs a good deal of rewiring. The obvious thing to do is to get a local electrical contractor and the L.E.B. or South-Eastern Electricity Board to quote for the job and give it to whichever is the cheaper. In future, the one will pay S.E.T. and the other will not; the one will have a competitive advantage and the other will not.
To return to the private builder doing decorating and repair work, another point which should be stressed is that it is the small firm which is involved. It is not the giants of the business who are involved. It is all very well for the Minister to talk about electrical manufacturers who have contracting departments who will receive 7s. 6d., but they are not the small firms, they are the giants of the business.
It is the small man who will be driven to the wall by the unfair competition provided by the Bill, which the Minister pretends, unless he accepts Amendment No. 258, it is his intention not to have. It must he unfair. It is blatantly and plainly unfair, and unless he is prepared to accept the Amendment, I can only assume that he knows it, and is not prepared to be fair.
The constant dripping attack on the small private firm seems to be a continuation of a highly unsatisfactory trend by which we are seeing the transference of a growing amount of power and of trade from private firms, and particularly small firms, to the State. This concentration of power and wealth in the hands of the State, which is the fundamental mark of a Socialist Government, is in direct contrast to what we believe in, which is the spreading of power and wealth as widely as possible throughout the community. Small traders, small builders, small decorators, and small electrical contractors are the people on whom competitive industry is built up, and the Bill is driving a knife into the opportunities available for the small firm to prosper.
Has the right hon. Gentleman any excuse to offer to these people? I ask him to accept Amendment No. 258, which embodies the phraseology which he used


to describe his objective in an earlier speech.

Mr. Ian Percival: I endorse all that has been said by my hon. Friends since the Minister sat down. The Minister said that the figures for contracting work could not be separated; and that in any event they represent only a small proportion of the total contracting work done by the electricity board. The second part of that is quite irrelevant and I believe that the first part is incorrect, because I have here the annual report and accounts of the Electricity Council for 1964–65, in which these figures are specified.
I wonder whether the Chief Secretary could pause to decide which way he should nod his head, instead of automatically nodding it that way? I can see that it may be possible for there to be some work of a different category in these contracting figures, but it cannot be anything like as big as the right hon. Gentleman says. In any event, the other figure given is the figure for sales of fittings, which is a comparable figure of sales carried out in direct competition with private enterprise, and the total of these two figures is no less than £80 million.
To suggest that this is a small matter is utter nonsense. It is £80 million, compared with a turnover of £150 million by private enterprise in the same field. Thus, if my arithmetic is correct, it is one-third of the total expenditure in these two fields, and I suggest to the Chief Secretary that it is an insult to the Committee to present an argument like he did.
The second point has been dealt with very fully by my hon. Friends that there is one other aspect which I want to mention. This argument that the people about whom we are concerned will get a premium under the Bill is the biggest nonsense that any of us has ever heard. If the right hon. Gentleman believes it, let

him come to Southport as my guest and meet my electrical contractors. If he can find one who will be given anything by way of premium to balance what he will lose by reason of this competition, I will give him as long a holiday as he likes in Southport. The right hon. Gentleman will realise that I make that offer not particularly because I want to see a Socialist Minister in my constituency—they are doing enough damage there already—but because I have considerable confidence in the wager.

The Minister says, from his comfortable position, that he knows that what he says is true. I do not put it as definitely as that, but I do say that if he really thinks that he must have been misled by someone; and if he does believe it I invite him to come down to earth and speak to some of the people whose views we are putting forward, and to hear what they say about it.

Mr. Costain: If the Chief Secretary thinks that, will he name a single firm that will benefit?

Mr. Percival: That is another challenge that he might like to take up at some time.
My hon. Friends and I are thinking of small businesses who have a difficult enough job as it is to compete with nationalised industries without having this extra burden placed upon them. It is quite untrue to say that this category will obtain any benefit under the Bill. They will not. It is all one way. That is why we feel so strongly about the Amendment, and about what I suggest to the Chief Secretary are the bogus arguments he has advanced—bogus in the sense that they are based on false premises, whether or not he knows it.

Question put, That those words be there inserted:—

The Committee divided: Ayes 229, Noes 295.

Division No. 141.]
AYES
[9.10 p.m.


Alison, Michael (Barkston Ash)
Bennett, Sir Frederic (Torquay)
Brewis, John


Allason, James (Hemel Hempstead)
Berry, Hn. Anthony
Brinton, Sir Tatton


Astor, John
Bessell, Peter
Bromley-Davenport,Lt.Col.Sir Walter


Atkins, Humphrey (M't'n — M'dn)
Biffen, John
Brown, Sir Edward (Bath)


Awdry, Daniel
Black, Sir Cyril
Bruce-Gardyne, J.


Baker, W. H. K.
Blaker, Peter
Bryan, Paul


Balniel, Lord
Bossom, Sir Clive
Buchanan-Smith,Alick(Angus,N—M)


Batsford, Brian
Boyd-Carpenter, Rt. Hn. John
Buck, Antony (Colchester)


Beamish, Col. Sir Tufton
Boyle, Rt. Hn. Sir Edward
Bullus, Sir Eric


Bell, Ronald
Brains, Bernard
Campbell, Gordon




Carlisle, Mark
Hiley, Joseph
Page, Graham (Crosby)


Carr, Rt. Hn. Robert
Hill, J. E. B.
Page, John (Harrow, W.)


Cary, Sir Robert
Hirst, Geoffrey
Pardoc, John


Channon, H. P. G.
Hobson, Rt. Hn. Sir John
Pearson, Sir Frank (Clitheroe)


Chichester-Clark, R.
Holland, Philip
Peel, John


Clark, Henry
Hobson, Emlyn
Percival, Ian


Clegg, Walter
Hordern, Peter
Peyton, John


Cooke, Robert
Hornby, Richard
Pink, R. Bonner


Cooper-Key, Sir Neill
Howell, David (Guildford)
Pounder, Rafton


Cordle, John
Hunt, John
Powell, Rt. Hn. J. Enoch


Corfield, F. V.
Hutchison, Michael Clark
Price, David (Eastleigh)


Costain, A. P.
Iremonger, T. L.
Prior, J. M. L.


Craddock, Sir Beresford (Spelthorne)
Irvine, Bryant Cadman (Rye)
Quennell, Miss J. M.


Crawley, Aidan
Jenkin, Patrick (Woodford)
Rawlinson, Rt. Hn. Sir Peter


Crouch, David
Johnson Smith, G. (E. Grinstead)
Rees-Davies, W. R.


Currie, G. B. H.
Johnston, Russell (Inverness)
Renton, Rt. Hn. Sir David


Dalkeith, Earl of Dance, James
Jones, Arthur (Northants, S.)
Ridley, Hn. Nicholas


Davidson ,James(Aberdeenshire,W.)
Jopling, Michael
Ridsdale, Julian


d'Avigdor-Geldsmid, Sir Henry
Joseph, Rt. Hn. Sir Keith
Rippon, Rt. Hn. Geoffrey


Dean, Paul (Somerset, N.)
Kaberry, Sir Donald
Robson Brown, Sir William


Deedes, Rt. Hn. W. F. (Ashford)
Kerby, Capt. Henry
Roots, William


Digby, Simon Wingfield
Kershaw, Anthony
Rossi, Hugh (Hornsey)


Dodds-Parker, Douglas
Kimball, Marcus
Russell, Sir Ronald


Doughty, Charles
King, Evelyn (Dorset, S.)
St. John-Stevas, Norman


Douglas-Home, Rt. Hn. Sir Alec
Kitson, Timothy
Scott, Nicholas


Drayson, G. B.
Knight, Mrs. Jill
Sharpies, Richard


du Cann, Rt. Hn. Edward
Lancaster, Col. C. G.
Shaw, Michael (Sc'b'gh — Whitby)


Eden, Sir John
Legge-Bourke, Sir Harry
Sinclair, Sir George


Elliot, Capt. Walter (Carshalton)
Lewis, Kenneth (Rutland)
Stainton, Keith


Elliott,R.W.(N'c'tle-upon-Tyne,N.)
Longden, Gilbert
Steel, David (Roxburgh)


Errington, Sir Eric
Loveys, W. H.
Stodart, Anthony


Eyre, Reginald
Lubbock, Eric
Stoddart-Scott, Col. Sir M. (Ripon)


Farr, John
MacArthur, Ian
Summers, Sir Spencer


Fisher, Nigel
Mackenzie,Alasdair(Ross—Cromity)
Tapsell, Peter


Fletcher-Cooke, Charles
Maclean, Sir Fitzroy
Taylor, Sir Charles (Eastbourne)


Fortescue, Tim
Macleod, Rt. Hn. Iain
Taylor,Edward M.(G'gow,Cathcart)


Foster, Sir John
McMaster, Stanley
Taylor, Frank (Moss Side)


Galbraith, Hn. T. G.
Macmillan, Maurice (Farnham)
Teeling, Sir William


Gibson-Watt, David
Maddan, Martin
Temple, John M.


Giles, Rear-Adm. Morgan
Maginnis, John E.
Thatcher, Mrs. Margaret


Gilmour, Ian (Norfolk, C.)
Marten, Neil
Thorpe, Jeremy


Gilmour, Sir John (Fife, E.)
Mathew, Robert
Tilney, John


Glover, Sir Douglas
Maude, Angus
Turton, Rt. Hn. R. H.


Glyn, Sir Richard
Maudling, Rt. Hn. Reginald
van Straubenzee, W. R.


Godber, Rt. Hn. J. B.
Mawby, Ray
Vickers, Dame Joan


Goodhart, Philip
Maxwell-Hyslop, R. J.
Wainwright, Richard (Colne Valley)


Goodhew, Victor
Maydon, Lt.-Cmdr. S. L. C.
Walker, Peter (Worcester)


Gower, Raymond
Mills, Peter (Torrington)
Walker-Smith, Rt. Hn. Sir Derek


Grant-Ferris, R.
Mills, Stratton (Belfast, N.)
Walters, Dennis


Gresham Cooke, R.
Miscampbell, Norman
Ward, Dame Irene


Griffiths, Eldon (Bury St. Edmunds)
Mitchell, David (Basingstoke)
Weatherill, Bernard


Gurden, Harold
Monro, Hector
Webster, David


Hall, John (Wycombe)
More, Jasper
Wells, John (Maidstone)


Hall-Davis, A. G. F.
Morgan, W. G. (Denbigh)
Whitelaw, William


Hamilton, Michael (Salisbury)
Morrison, Charles (Devizes)
Wills, Sir Gerald (Bridgwater)


Harris, Frederic (Croydon, N.W.)
Mott-Radclyffe, Sir Charles
Wilson, Geoffrey (Truro)


Harris, Reader (Heston)
Munro-Lucas-Tooth, Sir Hugh
Winstanley, Dr. M. P.


Harrison, Brian (Malden)
Murton, Oscar
Wolrige-Gordon, Patrick


Harrison, Cot. Sir Harwood (Eye)
Nabarro, Sir Gerald
Wood, Rt. Hn. Richard


Harvey, Sir Arthur Vere
Heave, Airey
Woodnutt, Mark


Harvie Anderson, Miss
Nicholls, Sir Harmar
Worsley, Marcus


Hawkins, Paul
Noble, Rt. Hn. Michael
Wylie, N. R.


Hay, John
Nott, John
Younger, Hn. George


Heald, Rt. Hn. Sir Lionel
Onslow, Cranley
TELLERS FOR THE AYES:


Heath, Rt. Hn. Edward
Orr, Capt. L. P. S.
Mr. Pym and Mr. Grant.


Heseltine, Michael
Orr-Ewing, Sir Ian



Higgins, Terence L.
Osborn, John (Hallam)




Osborne, Sir Cyril (Louth)





NOES


Abse, Lee
Barnes, Michael
Booth, Albert


Albu, Austen
Barnett, Joel
Boston, Terence


Allaun, Frank (Salford, E.)
Beaney, Alan
Bottomley, Rt. Hn. Arthur


Alldritt, Walter
Bellenger, Rt. Hn. F. J.
Bowden, Rt. Hn. Herbert


Allen, Scholefield
Bence, Cyril
Braddock, Mrs. E. M.


Anderson, Donald
Benn, Rt. Hn. Anthony Wedgwood
Bradley, Tom


Archer, Peter
Bennett, James (G'gow, Bridgeton)
Bray, Dr. Jeremy


Armstrong. Ernest
Bidwell, Sydney
Brooks, Edwin


Ashley, Jack
Binns, John
Broughton, Dr. A. D. D.


Atkins, Ronald (Preston, N.)
Bishop, E. S.
Brown,Bob (N'c' tle-upon-Tyne, W.)


Atkinson, Norman (Tottenham)
Blackburn, F.
Brown, Rt. Hn. George (Belper)


Bacon, Rt. Hn. Alice
Blenkinsop, Arthur
Brown, Hugh D. (G'gow, Provan)


Bagier, Gordon A. T.
Boardman, H.
Brown, R. W. (Shoreditch — F'bury)







Buchan, Norman
Horner, John
Page, Derek (King's Lynn)


Buchanan, Richard (G'gow, Sp'burn)
Houghton, Rt. Hn. Douglas
Palmer, Arthur


Butler, Herbert (Hackney C.)
Howarth, Harry (Wellingborough)
Pannell, Rt. Hn. Charles


Butler, Mrs. Joyce (Wood Green)
Howarth, Robert (Bolton, E.)
Parkyn, Brian (Bedford)


Cant, R. B.
Howie, W.
Pearson, Arthur (Pontypridd)


Carmichael, Neil
Hughes, Emrys (Ayrshire, S.)
Peart, Rt. Hn. Fred


Carter-Jones, Lewis
Hughes, Hector (Aberdeen, N.)
Pentland, Norman


Castle, Rt. Hn. Barbara
Hunter, Adam
Perry, Ernest G. (Battersea, S.)


Chapman, Donald
Hynd, John
Perry, George H. (Nottingham, S.)


Coe, Denis
Irvine, A. J. (Edge Hill)
Prentice, Rt. Hn. R. E.


Coleman, Donald
Jackson, Colin (B'h'se — Spenb'gh)
Price, Christopher (Perry Barr)


Concannon, J. D.
Jackson, Peter M. (High Peak)
Price, Thomas (Westhoughton)


Conlan, Bernard
Jay, Rt. Hn. Douglas
Price, William (Rugby)


Corbel, Mrs. Freda
Jeger, George (Goole)
Probert, Arthur


Craddock, George (Bradford, S.)
Jeger,Mrs.Lena(H'b'n—St.P'cras,S.)
Pursey, Cmdr. Harry


Crawshaw Richard
Jenkins, Hugh (Putney)
Rankin, John


Cronin, John
Johnson, Carol (Lewisham, S.)
Redhead, Edward


Crosland, Rt. Hn. Anthony
Johnson, James (K'ston-on-Hull, W.)
Rees, Merlyn


Dalyell, Tans
Jones, Dan (Burnley)
Reynolds, G. W.


Darling, Rt. Hn. George
Jones, J. Idwal (Wrexham)
Rhodes, Geoffrey


Davidson, Arthur (Accrington)
Judd, Frank
Richard, Ivor


Davies, Dr. Ernest (Stretford)
Kenyon, Clifford
Roberts, Albert (Normanton)


Davies, G. Elfed (Rhondda, E.)
Kerr, Mrs. Anne (R'ter — Chatham)
Roberts, Goronwy (Caernarvon)


Davies, Ednyfed Hudson (Conway)
Lawson, George
Roberts, Gwilym (Bedfordshire, S.)


Davies, Harold (Leek)
Leadbitter, Ted
Robertson, John (Paisley)


Davies, Robert (Cambridge)
Ledger, Ron
Robinson,Rt.Hn.Kenneth(St.P'c'as)


de Freitas, Sir Geoffrey
Lee, Rt. Hn. Frederick (Newton)
Robinson, W. 0. J. (Walth'stow, E.)


Delargy, Hugh
Lee, Rt. Hn. Jennie (Cannock)
Rodgers, William (Stockton)


Dell, Edmund
Lee, John (Reading)
Rose, Paul


Dempsey, James
Lestor, Miss Joan
Ross, Rt. Hn. William


Dewar, Donald
Lever, L. M. (Ardwick)
Rowland, Christopher (Meriden)


Diamond, Rt. Hn. John
Lewis, Arthur (W. Ham, N.)
Rowlands, E. (Cardiff, N.)


Dickens, James
Lewis, Ron (Carlisle)
Ryan, John


Dobson, Ray
Lomas, Kenneth
Shaw, Arnold (Ilford, S.)


Doig, Peter
Loughlin, Charles
Sheldon, Robert


Donnelly, Desmond
Luard, Evan
Shinwell, Rt. Hn. E.


Driberg, Tom
Lyon, Alexander W. (York)
Shore, Peter (Stepney)


Dunn, James A.
Lyons, Edward (Bradford, E.)
Short, Rt.Hn.Edward(N'c'tle-u-Tyne)


Dunwoody, Mrs. Gwyneth (Exeter)
McBride, Neil
Short, Mrs. Renée (W'hampton,N.E.)


Dunwoody, Dr. John (F'th — C'b'e)
McCann, John
Silkin, John (Deptford)


Eadie, Alex
MacColl, James
Silkin, S. C. (Dulwich)


Edelman, Maurice
MacDermot, Niall
Silverman, Julius (Aston)


Edwards, Robert (Bilston)
Macdonald, A. H.
Silverman, Sydney (Nelson)


Edwards, William (Merioneth)
McGuire, Michael
Skeffington, Arthur


Ellis, John
Mackenzie, Gregor (Rutherglen)
Slater, Joseph


English, Michael
Mackie, John
Small, William


Ennals, David
Mackintosh, John P.
Snow, Julian


Ensor, David
Maclennan, Robert
Spriggs, Leslie


Evans, Albert (Islington, S.W.)
McMillan, Tom (Glasgow, C.)
Steele, Thomas (Dunbartonshire, W.)


Evans, loan L. (Birm'h'm, Yardley)
McNamara, J. Kevin
Stewart, Rt. Hn. Michael


Fernyhough, E.
MacPherson, Malcolm
Stonehouse, John


Finch, Harold
Mahon, Peter (Preston, S.)
Strauss, Rt. Hn. G. R.


Fitch, Alan (Wigan)
Mallalieu,J.P. W.(Huddersfield,E.)
Summerskill, Hn. Dr. Shirley


Fletcher, Raymond (Ilkeston)
Manuel, Archie
Swain, Thomas


Fletcher, Ted (Darlington)
Mapp, Charles
Swingler, Stephen


Floud, Bernard
Marquand, David
Symonds, J. B.


Foley, Maurice
Mason, Roy
Taverne, Dick


Foot, Michael (Ebbw Vale)
Mayhew, Christopher
Thomas, George (Cardiff, W.)


Ford, Ben
Mellish, Robert
Thomas, Iorwerth (Rhondda, W.)


Forrester, John
Mendelson, J. J.
Thornton, Ernest


Fowler, Gerry
Milian, Bruce
Tinn, James


Fraser, Rt. Hn. Tom (Hamilton)
Miller, Dr. M. S.
Tomney, Frank


Gardner, A. J.
Mitchell, R. C. (S'th'pton, Test)
Urwin, T. W.


Garrow, Alex
Molloy, William
Varley, Eric G.


Ginsburg, David
Morgan, Elystan (Cardiganshire)
Wainwright, Edwin (Dearne Valley)


Gordon Walker, Rt. Hn. P. C.
Morris, Alfred (Wythenshawe)
Walden, Brian (All Saints)


Gourley, Harry
Morris, Charles R. (Openshaw)
Walker, Harold (Doncaster)


Gray, Dr. Hugh (Yarmouth)
Morris, John (Aberavon)
Wallace, George


Greenwood, Rt. Hn. Anthony
Moyle, Roland
Watkins, David (Consett)


Gregory, Arnold
Mulley, Rt. Hn. Frederick
Weitzman, David


Griffiths, David (Rother Valley)
Murray, Albert
Wells, William (Walsall, N.)


Griffiths, Rt. Hn. James (Llanelly)
Neal, Harold
Whitaker, Ben


Griffiths, Will (Exchange)
Newens, Stan
White, Mrs. Eirene


Hamilton, James (Bothwell)
Noel-Baker, Francis (Swindon)
Whitlock, William


Hamilton, William (Fife, W.)
Norwood, Christopher
wigg, Rt. Hn. George


Hamling, William
Oakes, Gordon
Williams, Alan (Swansea, W.)


Hannan, William
Ogden, Eric
Williams, Alan Lee (Hornchurch)


Harper, Joseph
O'Malley, Brian
Williams, Clifford (Abertillery)


Hart, Mrs. Judith
Orbach, Maurice
Williams, Mrs. Shirley (Hitchin)


Hazell, Bert
Orme, Stanley
Williams, W. T. (Warrington)


Heffer, Eric S.
Oswald, Thomas
Willis, George (Edinburgh, E.)


Henig, Stanley
Owen, Dr. David (Plymouth, S'ton)
Wilson, William (Coventry, 8.)


Hilton, W. S.
Owen, Will (Morpeth)
Winnick, David


Hooley, Frank
Padley, Walter








Winterbottom, R. E.
Yates, Victor
TELLERS FOR THE NOES:


Woof, Robert
Zilliacus, K.
Mr. Walter Harrison and


Wyatt, woodrow

Mr. Grey

Question proposed, That the Clause stand part of the Bill.

Sir Keith Joseph: This Clause is a thoroughly distasteful one to my hon. Friends for several reasons, some of which have been spelled out in a series of trenchant speeches by my hon. Friends which, I understand, have been thoroughly inadequately replied to by the Government.
I will draw attention to two major defects in the Clause. The first is that, once again, it provides us with an example of taxation by discretion. In line 15 the word "may" appears—the Minister is given power, discretion, to refund the tax to the payers. This is a thoroughly unsatisfactory method of taxation, even if in this case the bodies paying the tax are public enterprises. We deplore taxation by discretion wherever it may appear and it is another example of the Government's hasty imprecision in introducing the Bill, so that they did not have time to work out exactly how the tax would fall.
Our second major objection to the Clause is that its effect on the nationalised industries is so damaging to the public. If we consider Schedule 1, with which Clause 3 must be considered, we find that a number of the nationalised industries to which it refers are akin to services. If these were private enterprises, the employers would bear the tax without any refund, and without, of course, any premium, but because they are nationalised, and because a number of them are already bearing heavy losses —which are transferred straight to the taxpayer—the Government cannot trust them 10 bear the tax, as it would fall straight back on the Government and on the taxpayer.
The nationalised industries are not subject to any competition. They have no incentive to minimise the burden of the tax, to absorb it where possible. Since the taxpayer is the ultimate supporter of the nationalised industries in those many cases where they are making losses, the Government have had to refund the tax, or give power to the Minister to refund the tax, to those nationalised industries providing the service, when the private service industries are the very ones that bear the tax.
These are the main objections we have to the Clause, and if there were time, which the Guillotine denies us, we would ask the Government to spell out in some detail exactly how the discretion in subsection (2) will be used. I hope that, if there is time, the Minister will be able to answer that question, but because I know that a number of my hon. Friends want to make their views known I now simply register the fact that we find the Clause most distasteful, and will want to move the Committee against its standing part of the Bill.

Sir Arthur Vere Harvey: I support my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), because I have received a number of letters from constituents, both in Macclesfield and in Congleton, who are electrical installation engineers. They are mostly very small firms—the Chief Secretary laughs, but what is the joke'?

Mr. Diamond: There is no joke at all. I am listening very carefully to what the hon. Gentleman is saying. I was smiling only because this is a matter that we have just debated at some considerable length.

Sir A. V. Harvey: I hope that the right hon. Gentleman is convinced by the arguments. He would be if he were running a small firm in Macclesfield or Congleton, with one or two men, with only very limited capital on which to draw, seeing his costs go up right, left and centre in every sphere of the business, and then having this tax imposed while having to compete with nationalised industries which have almost unlimited capital. The nationalised industries never have to worry about capital—it is there for the asking, as we have seen since the war. I object very strongly to this Clause, because these men are getting a very raw deal.
The Government went to the country in March and made all sorts of promises about looking after small men and small businesses, but all we see is that those men and those businesses are being penalised to the hilt. But the Government's sins will find them out, and the country will awaken to how they have been misled by the Labour Government.
What is being done is shameful and disgraceful.

Sir Douglas Glover: I support what has been said by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) about discrimination against the small trader in favour of the nationalised industries, but a far greater constitutional issue involved here is that the Government are again taking permissive powers to do something without the control of the House of Commons.
Hon. Members opposite seem to have very quickly lost in their minds the reason why they were returned here. They were returned to consider legislation, to debate it, and to pass on to their constituents what is the law of the land. How can any Member of the House of Commons pass on to the electorate what the law is when we allow permissive legislation to go through? The right hon. Gentleman has never explained, and I do not suppose that he will explain now, what will happen under this permissive legislation.
What steps will be taken? How favourable will be the position of the nationalised industries vis-à-vis the private traders? We are giving permissive legislation to the Government just when, in fact, the House of Commons ought to be trying to get a grip on the Executive. We have heard speeches from the other side. Learned dons come here and teach us how to run our affairs, saying that it is a waste of time for Members of Parliament to try to control the Executive. It would not be a waste of time if the back benchers were determined to control the Executive. 
9.30 p.m. 
If hon. Members opposite had enough spunk in their bones to try to control the Executive this sort of legislation would never be brought to the Statute Book. They are returned with the idea that so much of our procedure is archaic and out of date and that it is a waste of time to have a debate. They know that, whatever happens, they will vote for the Government, however they disapprove of the Government's actions. When we were debating the Resale Prices Bill in the last Conservative Government, back benchers on the Conservative side showed a totally different approach to the

problem than that shown by hon. Members opposite now. That was a very good thing for Parliament. It was back benchers doing their job. On one occasion when we had as big a majority as hon. Members opposite have, the Government won by one vote. There was no pulling of punches then. People who felt deeply about the issue were prepared to go into the Lobby to support their view. 
We have not had a speech from either side of the Committee this evening supporting even lukewarmly the Government's proposals. Hon. Members opposite know that again they are allowing the Executive to pass legislation giving the Executive an increase in power to decide, after this Bill has left the House, what the Executive are to do.

Sir A. V. Harvey: Does my hon. Friend recall that during the long debates on resale price maintenance the Prime Minister never spoke once and hardly appeared in the Chamber?

Sir D. Glover: I am grateful to my hon. Friend, but I thought it was obvious, not only to this side of the Committee but to the other side, that the Prime Minister has treated the House of Commons with complete contempt. He is quite convinced that with his majority and with his elan he can get away with murder. Perhaps it is a good thing that we abolished capital punishment—[An HON. MEMBER: "You voted against it."]—Of course I voted against the abolition.

Sir Harmar Nicholls: My hon. Friend wanted to hang the Prime Minister?

Sir D. Glover: In social justice I cannot think of anything better for the nation than to do what my hon. Friend has suggested, but I do not want to be carried away, Mr. Irving. You must admit that I have been under some provocation. I was not certain whether it was the Prime Minister or I who was being guillotined. Parliament has the opportunity, if it desires to use it, to control the Executive. It only needs back benchers to have the courage for what they believe in. This has been done many times while I have been in Parliament, but it appears that on this occasion hon. Members opposite are completely gagged by their Whips. They are pusillanimous, have no backbone and


are not prepared to stand for what they believe. The result is that they are allowing the Executive to get more and more power.
We had an example this afternoon of an hon. Member saying that he would like to do something, but the precedent in this House was contrary to what he would like. Once Parliament allows permissive legislation—[An HON. MEMBER:" What has this to do with the Clause? "]— It has a lot to do with the Clause. Once Parliament allows permissive legislation in this way in the next Parliament, which may be with a Conservative Government—

Mr. Robert Cooke: May be? Withdraw.

Sir D. Glover: I willingly withdraw—it will be. Hon. Members opposite will be worried because the Executive will then be using the precedent established by this Bill for more permissive legislation. That is exactly what we were sent here to stop.

Mr. John Hall: My hon. Friend the Member for Ormskirk (Sir D. Glover) has, as usual, put his finger on the point that matters. He has drawn attention, as did my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), to the unacceptable and abhorrent aspect of the Bill, which enables the Government to indulge in permissive legislation. When I am showing constituents round the Palace of Westminster, as many hon. Members on both sides do, I draw their attention to the pictures to be seen in the Lords Corridor, which show some of the incidents of the Civil War. I point out that this was a time when there was a struggle between Crown and Parliament, a struggle which Parliament won.
Today there is, as I point out to them, a struggle between Parliament and the Executive, and it would seem that, if we have many more Bills like this, it will be the Executive which will win. This is something which the House of Commons should oppose with all the force at its command. We should not allow this to pass without the strongest contest.
I pass from that to what is, by comparison. a small point. Like many hon. Members on both sides, I have received

letters from small traders and others who are worried about the possible effects of the Bill. I have picked out one of the many hundreds of letters that I have received. It is from a firm of electrical contractors. I quote two short paragraphs. My constituents say:
 It has been suggested that the retailing departments of the area electricity boards should receive a refund of the tax on their sales and contracting work. Healthy competition is good for any business, but if a refund is made to the electricity board and not to the contracting businesses, this could bring about the closure of many small firms.
Is it the Government's intention to give a refund to electricity boards? If the Chief Secretary cannot give an answer, if it turns out to be the fact that nationalised industries will be at an advantage in competition with the smaller contractors throughout the country, this will undoubtedly cause considerable dismay to many people who are engaged in private enterprise and who have, over many years, in face of great difficulty, built up businesses of considerable value to the country as a whole. This is a most unfortunate and reprehensible Clause. I am delighted that my right hon. Friend the Member for Leeds, North-East has advised the Committee to divide against it.

Mr. Robert Cooke: I would willingly give way to the Chief Secretary if I thought that he had anything new to say in reply to the argument which has been adduced. However, I feel that he has not. Therefore, in the short time that remains, I will speak up on behalf of many of my constituents who find themselves in a hopeless position because of the provisions of the Clause.
One of the things that the Government have always said that nationalised industries should have is effective competition from private enterprise, that nationalised industries should not be in a privileged position. If, as a result of the Clause, private enterprise is completely destroyed, there will be no competition and no efficiency. The Government should address their minds to this problem.
Under the Clause, taxation can be imposed by discretion. We have had nothing like an adequate reply from the Government on this vital matter. We are told that the Minister may, if he feels so inclined, or if he thinks it is justified,


remit the tax or make payments back. This is thoroughly unsatisfactory to our point of view and to the Committee as a whole. It is just like the building controls which are being imposed without any statutory force whatsoever. This is government by decree. Permissive powers are being given to the Government to use as they like long into the future.
Then there is this messy little Schedule containing a long list of people who are

to receive favoured treatment. I am prepared to wager the Government

It being twenty minutes to Ten o'clock [the House having resolved itself into the Committee at ten minutes past Four o'clock], The CHAIRMAN proceeded, pursuant to Order [18th July], to put forthwith the Question already proposed from the Chair.

Question put, That the Clause stand part of the Bill:

The Committee divided: Ayes 303, Noes 230.

Division No. 142.]
AYES
[9.40 p.m.


Abse, Leo
Davies, Ednyfed Hudson (Conway)
Honig, Stanley


Albu, Austen
Davies, Harold (Leek)
Hilton, W. S.


Allaun, Frank (Salford, E.)
Davies, Robert (Cambridge)
Hooley, Frank


Alldritt, Walter
de Freitas, Sir Geoffrey
Horner, John


Allen, Scholefield
Delargy, Hugh
Houghton, Rt. Hn. Douglas


Anderson, Donald
Dell, Edmund
Howarth, Harry (Wellingborough)


Archer, Peter
Dempsey, James
Howarth, Robert (Belton, E.)


Armstrong, Ernest
Dewar, Donald
Howie, W.


Ashley, Jack
Diamond, Rt. Hn. John
Hoy, James


Atkins, Ronald (Preston, N.)
Dickens, James
Hughes, Emrys (Ayrshire, S.)


Atkinson, Norman (Tottenham)
Dobson, Ray
Hughes, Hector (Aberdeen, N.)


Bacon, Rt. Hn. Alice
Doig, Peter
Hunter, Adam


Bagier, Gordon A. T.
Donnelly, Desmond
Hynd, John


Barnes, Michael
Driberg, Tom
Irvine, A. J. (Edge Hill)


Barnett, Joel
Dunn, James A.
Jackson, Colin (B'h'se — Spenb'gh)


Beaney, Alan
Dunwoody, Mrs. Gwyneth (Exeter)
Jackson, Peter M. (High Peak)


Bellenger, Rt. Hn. F. J.
Dunwoody, Dr. John (F'th — C'b'e)
Jay, Rt. Hn. Douglas


Bence, Cyril
Eadie, Alex
Jager, George (Goole)


Benn, Rt. Hn. Anthony Wedgwood
Edelman, Maurice
Jeger,Mrs.Lena (H'b'n—St.P'cras.S.)


Bennett, James (G'gow, Bridgeton)
Edwards, Robert (Bilston)
Jenkins, Hugh (Putney)


Bidwell, Sydney
Edwards, William (Merioneth)
Johnson, Carol (Lewisham, S.)


Burns, John
Ellis, John
Johnson, James (K'ston-on-Hull, W.)


Bishop, E. S.
English, Michael
Jones, Dan (Burnley)


Blackburn, F.
Ennals, David
Jones, J. Idwal (W rex ham)


Blenkinsop, Arthur
Ensor, David
Judd, Frank


Boardman, H.
Evans, Albert (Islington, S.W.)
Kelley, Richard


Booth, Albert
Evans, loan L. (Birm'h'm, Yardley)
Kenyon, Clifford


Boston, Terence
Fernyhough, E.
Kerr, Mrs. Anne (R'ter — Chatham)


Bottomley, Rt. Hn. Arthur
Finch, Harold
Kerr, Russell (Feltham)


Bowden, Rt. Hn. Herbert
Fitch, Alan (Wigan)
Lawson, George


Braddock, Mrs. E. M.
Fletcher, Raymond (Ilkeston)
Leadbitter, Ted


Bradley, Tom
Fletcher, Ted (Darlington)
Ledger, Ron


Bray, Dr. Jeremy
Floud, Bernard
Lee, Rt. Hn. Frederick (Newton)


Brooks, Edwin
Foley, Maurice
Lee, Rt. Hn. Jennie (Cannock)


Broughton, Dr. A. D. D.
Foot, Sir Dingle (Ipswich)
Lee, John (Reading)


Brown, Bob(N'c'tle-upon-Tyne,W.)
Foot, Michael (Ebbw Vale)
Lestor, Miss Joan


Brown, Rt. Hn. George (Beiper)
Ford, Ben
Lever, L. M. (Ardwick)


Brown, Hugh D. (G'gow, Provan)
Forrester, John
Lewis, Arthur (W. Ham, N.)


Brown, R. W. (Shoreditch — F'bury)
Fowler, Gerry
Lewis, Ron (Carlisle)


Buchan, Norman
Fraser, Rt. Hn. Tom (Hamilton)
Lomas, Kenneth


Buchanan, Richard (G'gow, Sp'burn)
Freeson, Reginald
Loughlin, Charles


Butler, Herbert (Hackney, C.)
Gardner, A. J.
Luard, Evan


Butter, Mrs. Joyce (Wood Green)
Darrow, Alex
Lyon, Alexander W. (York)


Cant, R. B.
Ginsburg, David
Lyons, Edward (Bradford, E.)


Carmichael, Neil
Gordon Walker, Rt. Hn. P. C.
McBride, Neil


Carter-Jones, Lewis
Gourlay, Harry
McCann, John


Chapman, Donald
Gray, Dr. Hugh (Yarmouth)
MacColl, James


Coe, Denis
Greenwood, Rt. Hn. Anthony
MacDermot, Niall


Coleman, Donald
Gregory, Arnold
Macdonald, A. H.


Concannon, J. D.
Grey, Charles (Durham)
McGuire, Michael


Conlan, Bernard
Griffiths, David (Pother Valley)
Mackenzie, Gregor (Rutherglen)


Corbet, Mrs. Freda
Griffiths, Rt. Hn. James (Llanelly)
Mackie, John


Craddock, George (Bradford, S.)
Griffiths, Will (Exchange)
Mackintosh, John P.


Crawshaw, Richard
Hamilton, James (Bothwell)
Maclennan, Robert


Cronin, John
Hamilton, William (Fife, W.)
McMillan, Tom (Glasgow, C.)


Crosland, Rt. Hn.
Hamling, William
McNamara, J. Kevin


Anthony Crossman, Rt. Hn. Richard
Hannan, William
MacPherson, Malcolm


Dalyell, Tam
Harper, Joseph
Mahon, Peter (Preston, S.)


Darling, Rt. Hn. George
Hart, Mrs. Judith
Mallalieu J.P.W.(Huddersfieid,E.)


Davidson, Arthur (Accrington)
Hazell, Bert
Manuel, Archie


Davies, Dr. Ernest (Stretford)
Heffer, Eric S.
Mapp, Charles


Davies, C. Elfed (Rhondda, E.)






Marquand, David
Price, William (Rugby)
Summerskill, Hn. Dr. Shirley


Mason, Roy
Probert, Arthur
Swain, Thomas


Maxwell, Robert
Pursey, Cmdr. Harry
Swingler, Stephen


Mayhew, Christopher
Rankin, John
Symonds, J. B.


Mellish, Robert
Redhead, Edward
Taverne, Dick


Mendelson, J. J.
Rees, Merlyn
Thomas, George (Cardiff, W.)


Millan, Bruce
Reynolds, G. W.
Thomas, Iorwerth (Rhondda, W.)


Miller, Dr. M. S.
Rhodes, Geoffrey
Thornton, Ernest


Mitchell, R.C. (S'th'pton, Test)
Richard, Ivor
Tinn, James


Molloy, William
Roberts, Albert (Normanton)
Tomney, Frank


Morgan, Elystan (Cardiganshire)
Roberts, Goronwy (Caernarvon)
Urwin, T. W.


Morris, Alfred (Wythenshawe)
Roberts, Gwilym (Bedfordshire, s.)
Varley, Eric C.


Morris, John (Aberavon)
Robertson, John (Paisley)
Wainwright, Edwin (Dearne Valley)


Moyle, Roland
Robinson,Rt.Hn.Kenneth(St.P'c'as)
Walden, Brian (All Saints)


Mulley, Rt. Hn. Frederick
Robinson W. 0. J. (Walth'stow E.)
Walker, Harold (Doncaster)


Murray, Albert
Rodgers, William (Stockton)
Wallace, George


Neal, Harold
Rogers, George
Watkins, David (Consett)


Newens, Stan
Rose, Paul
Weitzman, David


Noel-Baker, Francis (Swindon)
Ross, Rt. Hn. William
Wells, William (Walsall, N.)


Norwood, Christopher
Rowland, Christopher (Meriden)
Whitaker, Ben


Oakes, Gordon
Rowlands, E. (Cardiff, N.)
White, Mrs. Eirene


Ogden, Eric.
Ryan, John
Whitlock, William


O'Malley, Brian
Shaw, Arnold (Ilford, S.)
Wigg, Rt. Hn. George


Orbach, Maurice
Sheldon, Robert
Willey, Rt. Hn. Frederick


Orme, Stanley Oswald, Thomas
Shinwell, Rt. Hn. E.
Williams, Alan (Swansea, W.)


Owen, Dr. David (Plymouth, S'tn)
Shore, Peter (Stepney)
Williams, Alan Lee (Hornchurch)


Owen, Will (Morpeth)
Short,Rt.Hn.Edward(N'c'tle-u-Tyne)
Williams, Clifford (Abertillery)


Padley, Walter
Short, Mrs. Renée (W'hampton,N.E.)
Williams, Mrs. Shirley (Hitchin)


Page, Derwt (King's Lynn)
Silkin, John (Deptford)
Williams, W. T. (Warrington)


Palmer, Arthur
Silkin, S. C. (Dulwich)
Willis, George (Edinburgh, E.)


Pannell, Rt. Hn. Charles
Silverman, Julius (Aston)
Wilson, William (Coventry, S.)


Parkyn, Brian (Bedford)
Silverman, Sydney (Nelson)
Winnick, David


Pearson, Arthur (Pontypridd)
Skeffington, Arthur
Winterbottom, R. E.


Pearl, Rt. Hn. Fred
Slater, Joseph
Woof, Robert


Pentland, Norman
Small, William
Wyatt, Woodrow


Perry, Erntst G. (Battersea, S.)
Snow, Julian
Yates, Victor


Perry, George H. (Nottingham,s.)
Spriggs, Leslie
Zilliacus, K.


Prentice, Rt. Hn. R. E.
Steele, Thomas (Durbartonshire, W.)
TELLERS FOR THE AYES:


Price, Christopher (Perry Barr)
Stewart, Rt. Hn. Michael
Mr. Charles R. Morris and


Price, Thomas (Westhoughton)
Stonehouse, John
Mr. Walter Harrison.



Strauss, Rt. Hn. C. R.





NOES


Alison, Michael (Barkston Ash)
Cordle, John
Grant, Anthony


Allason, James (Hemel Hempstead)
Corfield, F. V.
Grant-Ferris, R.


Astor, John
Contain, A. P.
Gresham Cooke, R.


Atkins, Humphrey (M't'n — M'd'n)
Craddock, Sir Beresford (Spelthorne)
Griffiths, Eldon (Bury St. Edmunds)


Awdry, Daniel
Crawley, Aldan
Gurden, Harold


Baker, W. H. K.
Crouch, David
Hall, John (Wycombe)


Balniel, Lord
Currie, G. B. H.
Hall-Davis, A. G. F.


Batsford, Brian
Dalkeith, Earl of
Hamilton, Michael (Salisbury)


Beamish, Col. Sir Tufton
Dance, James
Harris, Frederic (Croydon, N.W.)


Bell, Ronald
Davidson,James(Aberdeenshire,W.)
Harris, Reader (Heston)


Bennett, Sir Frederic (Torquay)
d'Avigdor-Goldsmid, Sir Henry
Harrison, Brian (Maldon)


Berry, Hn. Anthony
Dean, Paul (Somerset, N.)
Harrison, Col. Sir Harwood (Eye)


Bessell, Peter
Deedes, Rt. Hn. W. F. (Ashford)
Harvey, Sir Arthur Vere


Biffen, John
Digby, Simon Wingfield
Harvie Anderson, Miss


Birch, Rt. Hn. Nigel
Dodds-Parker, Douglas
Hawkins, Paul


Black, Sir Cyril
Doughty, Charles
Hay, John


Blaker, Peter
Douglas-Home, Rt. Hn. Sir Alec
Heald, Rt. Hn. Sir Lionel


Bossom, Sir Clive
Drayson, G. B.
Heath, Rt. Hn. Edward


Boyd-Carpenter, Rt. Hn. John
du Cann, Rt. Hn. Edward
Heseltine, Michael


Boyle, Rt. Hn. Sir Edward
Eden, Sir John
Higgins, Terence L.


Brains, Bernard
Elliot, Capt. Walter (Carshalton)
Haley, Joseph


Brewis, John
Elliott, R.W.(N'ctle-upon-Tyne,N.)
Hill, J. E. B.


Brinton, Sir Talton
Errington, Sir Eric
Hirst, Geoffrey


Bromley-Davenport, Lt.Col. Sir Walter
Eyre, Reginald
Hobson, Rt. Hn. Sir John


Brown, Sir Edward (Bath)
Farr, John
Hogg, Rt. Hn. Quintin


Bruce-Gardyne, J.
Fisher, Nigel
Holland, Philip


Bryan, Paul
Fletcher-Cooke, Charles
Hooson, Emlyn


Buchanan-Smith,Alick(Angus,N—M)
Fortescue, Tim
Hordern, Peter


Buck, Antony (Colchester)
Foster, Sir John
Hornby, Richard


Bullus, Sir Eric
Galbraith, Hn. T. G.
Hunt, John


Campbell, Gordon
Gibson-Watt, David
Hutchison, Michael Clark


Carlisle, Mark
Giles, Rear-Adml. Morgan
Iremonger, T. L.


Carr, Rt. Hn. Robert
Gilmour, Ian (Norfolk, C.)
Irvine, Bryant Coffman (Rye)


Cary, Sir Robert
Gilmour, Sir John (Fife, E.)
Jenkin, Patrick (Woodford)


Channon, H. P. G.
Glover, Sir Douglas
Johnson Smith, G. (E. Grinstead)


Chichester-Clark, R.
Glyn, Sir Richard
Johnston, Russell (Inverness)


Clark, Henry
Godber, Rt. Hn. J. B.
Jones, Arthur (Northants, S.)


Clegg, Walter
Godhart, Philip
Jopling, Michael


Cooke, Robert
Godhew, Victor
Joseph, Rt. Hn. Sir Keith


Cooper-Key, Sir Neill
Gower, Raymond
Kaberry, Sir Donald







Kerby, Capt. Henry
Murton, Oscar
Stainton, Keith


Kershaw., Anthony
Nabarro, Sir Gerald
Steel, David (Roxburgh)


Kimball, Marcus
Neave, Airey
Stodart, Anthony


King, Evelyn (Dorset, S.)
Nicholls, Sir Harmar
Stoddart-Scott, Col. Sir M. (Ripon)


Kitson, Timothy
Noble, Rt. Hn.
Summers, Sir Spencer


Knight, Mrs. Jill
Michael Nott, John
Tapsell, Peter


Lancaster, Col. C. G.
Onslow, Cranley
Taylor, Sir Charles (Eastbourne)


Legge-Bourke, Sir Harry
Orr, Capt. L. P. S.
Taylor,Edward M.(G'gow,Cathcart)


Lewis, Kenneth (Rutland)
Orr-Ewing, Sir Ian
Taylor, Frank (Moss Side)


Lloyd,Rt.Hn.Geoffrey(SutinC'dfield)
Osborn, John (Hallam)
Teeling, Sir William


Lloyd, Rt. Hn. Selwyn (Wirral)
Osborne, Sir Cyril (Louth)
Temple, John M.


Longden, Gilbert
Page, Graham (Crosby)
Thatcher, Mrs. Margaret


Loveys, W. H.
Page, John (Harrow, W.)
Thorpe, Jeremy


Lubbock, Eric
Particle, John
Tilney, John


MacArthur, Ian
Pearson, Sir Frank (Clitheroe)
Turton, Rt. Hn. R. H.


Mackenzie, Alasdair(Ross—Crom'ty)
Peel, John
van Straubenzee, W. R.


Maclean, Sir Fitzroy
Percival, Ian
Vickers, Dame Joan


Macleod, Rt. Hn. lain
Peyton, John
Wainwright, Richard (Coins Valley)


McMaster, Stanley
Pink, R. Bonner
Walker, Peter (Worcester)


Macmillan, Maurice (Farnham)
Pounder, Rafton
Walker-Smith, Rt. Hn. Sir Derek


Maddan, Martin
Powell, Rt. Hn. J. Enoch
Walters, Dennis


Maginnis, John E.
Price, David (Eastleigh)
Ward, Dame Irene


Marten, Neil
Prior, J. M. L.
Weatherill, Bernard


Mathew, Robert
Pym, Francis
Webster, David


Maude, Angus
Quennell, Miss J. M.
Wells, John (Maidstone)


Maudling, Rt. Hn. Reginald
Rawlinson, Rt. Hn. Sir Peter
Whitelaw, William


Mawby, Ray
Rees-Davies, W. R.
Wills, Sir Gerald (Bridgwater)


Maxwell-Hyslop, R. J.
Renton, Rt. Hn. Sir David
Wilson, Geoffrey (Truro)


Maydon, Lt.-Cmdr. S. L. C.
Ridley, Hn. Nicholas
Winstanley, Dr. M. P.


Mills, Peter (Torrington)
Ridsdale, Julian
Wolrige-Gordon, Patrick


Mills, Stratton (Belfast, N.)
Rippon, Rt. Hn. Geoffrey
Wood, Rt. Hn. Richard


Miscampbell, Norman
Rossi, Hugh (Hornsey)
Woodnutt, Mark


Mitchell, David (Basingstoke)
Russell, Sir Ronald
Worsley, Marcus


Monro, Hector
St. John-Stevas, Norman
Wylie, N. R.


Morgan, W. G. (Denbigh)
Scott, Nicholas
TELLERS FOR THE NOES:


Morrison, Charles (Devizes)
Sharpies, Richard
Mr. More and Mr. Younger.


Mott-Radclyffe, Sir Charles
Shaw, Michael (Sc'b'gh — Whitby)



Munro-Lucas-Tooth, Sir Hugh
Sinclair, Sir George

The CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the Business to be concluded at twenty minutes to Ten o'clock, including the Questions on Amendments, moved by a member of the Government, of which notice had been given, to Clause 4.

Clause 4.—(PAYMENTS TO LOCAL AUTHORITIES, ETC.)

Amendments made: In page 5, line 40 after "Act", insert
 entitled to claim in respect of those persons under the said section 5 ".
In page 6, line 1, leave out "a local authority" and insert
 an authority such as is mentioned in subsection 1(a) or (b) of this section ".

Clause, as amended, ordered to stand part of the Bill.

Clause 5.—(REFUNDS TO CHARITIES.)

Amendment made: In page 6, line 32, leave out "subsection (2)" and insert "subsections (2) and (4)".—[Mr. Mac-Dermot.]

Mr. Gordon Campbell: I beg to move Amendment No. 146, in page 6, line 34, to leave out

Minister of Labour "and insert" appropriate Minister ".

The Deputy Chairman: It would be for the convenience of the Committee if we took with this Amendment No. 147, in page 6, line 36, at end insert:
(2) For the purposes of this section, the appropriate Minister in relation to any charity shall be, for English charities the Minister of Labour, for Scottish charities, the Secretary of State for Scotland and for Welsh charities the Secretary of State for Wales.
(3) For the purposes of this section, the nationality of a charity shall be determined by the law applicable to it, and whether its governing body usually meets in Wales.

Mr. Campbell: I was one of the six sponsors, headed by my hon. and learned Friend the Member for Antrim, South (Sir Knox Cunningham), who put a Motion on the Order Paper soon after the Selective Employment Tax was announced. That Motion sought to exempt charities from the tax. There followed a period when the Government made it clear that they were intending that charities should pay the tax. We heard arguments from the Front Bench opposite to the effect that charities had to pay indirect taxation and Purchase Tax and they would have to pay this tax.
Eventually, the Government gave way and we welcomed this.
The way in which charities were to be exempted was that they would receive repayment under this Bill. To that extent we welcome Clause 5, although we are sorry that they have to make a forced loan to the Government for about five months. The part of the Clause which we seek to change with Amendment No. 147 is that relating to the Minister of Labour being the Minister to make repayments in Scotland and Wales. Instead we seek to make the Secretaries of State perform that duty.
You will know, Mr. Irving, that we deplore the fact that the Guillotine has made impossible to speak on the major adverse effects of this Bill on large areas of Scotland and its very heavy impact because of so little in the way of repayments coming back in refunds and premiums to those areas. This will lead to depopulation and emigration. We believe that the premium for charities should be carried out by the Secretaries of State. I understand that in England charities are registered officially. In Scotland there is a different system, based on recognition by the Secretary of State for Scotland. Presumably subsection (4) of this Clause is there for that reason, because it stipulates that the Minister of Labour may not make a repayment without the Secretary of State for Scotland certifying that a charity is a charity.
In that case, why should not the Secretary of State carry out this whole operation? It would much tidier and would ensure that charities recognised by the Secretary of State for Scotland, which is the equivalent of registration, were fairly treated and were entitled under the Bill to the repayment of the tax. Likewise, when the governing body of a charity meets in Wales and it is clearly a Welsh charity, the Secretary of State for Wales should be responsible for the repayment.
Under the Guillotine, this is the only Scottish point in the Bill likely to be considered. In view of the heavy impact that the taxes will have in large areas of Scotland, we consider that this is deplorable. However, we hope that the Government will meet the limited point which we make in these Amendments.

Mr. Ian MacArthur: I very much hope that the Government will accept the Amendment which has been so ably moved by my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell). I join him in condemning the Government for gagging Scotland in the consideration of this Bill. This is the only opportunity which we have to discuss one limited aspect of the Bill's application to Scotland.
I hope that the Government will agree to introduce the Secretary of State as the Minister responsible in this Clause. I must confess that I do not always have the greatest regard for the right hon. Gentleman, but I believe that even he is more familiar with the problems of Scotland and with the needs of charities in Scotland than the Minister of Labour, who is specified in the Bill as the responsible Minister. Moreover, the Secretary of State has a very much greater knowledge of life in Scotland generally and the need for charitable action in relieving poverty than his colleagues in the Government. It is he, more than anyone else, who will be able to identify charities.
The Secretary of State knows the harsh effect which this tax will have on many industries in Scotland, on agriculture and on areas such as the Highlands and Islands. We were precluded earlier from debating the problems of the Highlands and Islands by the harsh and vicious timetable introduced by the Government. By the Amendment the Government have an opportunity to meet many of their own declared objectives relating to Scotland and the Highlands in particular. Earlier, we had an Amendment which was selected, but not called because of the timetable, whereby the Selectiye Employment Tax would have been repaid to areas within which the functions of the Highlands and Islands Development Board might be exercised.
I have no doubt that had we debated that Amendment the Government would have accepted it because it was entirely in line with their declared aim of providing a job for everyone in the Highlands and everyone wanting to return to the Highlands. The establishment of the Board has not been sufficient to achieve this very desirable aim, and emigration continues. The effect of the tax will be


to accelerate this drain of manpower because alternative employment in manufacturing industry for those at present in the service industries in the Highlands simply does not exist. The position will be made worse by the shake-out on which the Prime Minister has embarked.
Recent Questions tabled by my hon. Friend the Member for Moray and Nairn tried to discover what the effect of the tax would be on the Highlands. The reply showed that 18 per cent. of the gross yield of the tax would be returned to the Highlands in repayments compared with 68 per cent. in England. This illustrates how the tax will impinge most severely on the Highlands. I will at once relate my argument to the Amendment, as I see a sign of impatience in your eye, Mr. Irving.
So far, the Government have failed lamentably to achieve what they promised for the Highlands. I want to help by supporting the Amendment, which opens the way for the Government to do for the Highlands what they pretended before the General Election that they wanted to do. If we are suggesting that the Secretary of State should be responsible for charities in the Clause, we must be clear—

It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress.

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,

That the Proceedings of the Committee of Ways and Means may be entered upon and proceeded with at this day's Sitting, at any hour, though opposed.—[Mr. Charles R. Morris.]

Orders of the Day — SELECTIVE EMPLOYMENT PAYMENTS BILL

Again considered in Committee.

Question again proposed.

Mr. MacArthur: I was saying that we have to be quite clear what the definition of charities is within the Amendment. The law governing the definition of charities in Scotland is, I understand, somewhat different from the law of England.

I am a layman in these matters, so I am on a par with the right hon. Gentleman and his colleagues who do not have the advantage at the moment of advice from a Law Officer.
I have turned to what I believe is a recognised authority in these matters, "Gloag and Henderson's Introduction to the Law of Scotland". This is only an Introduction, but it is the sixth edition, and I presume that it has a certain authority in Scots law. It refers to the definition of charity, and declares on page 596, paragraph 6:
 There is no precise definition in the law of Scotland of the words ' charity ' and ' charitable' ".
It goes on to say, as the right hon. Gentleman will know:
 In Baird's Trust versus the Lord Advocate, in which the question was whether a certain trust was charitable within the meaning of the Income Tax Acts, it was laid down that in their popular meaning the words were confined to the relief of poverty ".
I understand that this definition, "the relief of poverty", is critical in the establishment of any charitable trust or foundation in Scotland. It follows that if one is to determine what is a charity within the meaning of the Amendment one must be able to determine what is meant by the relief of poverty. I therefore turn to another authority. [Laughter.] This is no laughing matter. It is a very serious argument.
In Volume 13 of the Oxford English Dictionary poverty is equated with the old Scots word, "poorith", which means
the condition of having little or no wealth or material possessions or a deficiency, lack, scantiness, dearth, scarcity and smallness of amount".
All of these are words which describe the effect that this tax will have on the Highlands of Scotland. It will lead to deficiency, to lack of employment, and a lack of people, to a scantiness of opportunity, to a dearth of our population, and to smallness of amount in terms of the new prosperity for which we all hope for the Highlands of Scotland. The word also means, according to the dictionary:
 deficiency in the proper or desired quality.
It was just these considerations which encouraged the Government to introduce their Highland Development (Scotland) Bill. On the Second Reading of that Bill, on 16th March, 1965, the right hon.


Gentleman called attention to the particular problems of the Highlands. He ref: rred to the "land hunger" and to the past when the people of the Highlands had to ' scratch a living".
I therefore submit that it is quite reasonable, in the context of the Amendment, to suggest that any form of employment, any industry, any branch of agriculture, any board, anything, in short, to help the people of the Highlands, will be for the relief of scarcity, dearth, and scantiness, all of which are defined in the dictionary as poverty.
It follows, therefore, that it would be possible to include under this Amendment any form of employment in the Highlands. By accepting the Amendment, and by using the good offices and occasional wise judgment of the Secretary of State, it would be possible to define as a charity, a body acting for the relief of poverty, a hotel, a laundry, a small retail electrical establishment, a farmer or any of the bodies in the Highlands which are now under the most enormous threat because of the Bill which the Government have introduced without any regard whatever to the problems of the Highlands and the outlying areas and which they have prohibited us from debating in Committee by their vicious timetable.
There is here the means for the right hon. Gentleman to meet the objectives which he has over and over again declared, but which he has by his actions over and over again denied. I call on him now to accept the Amendment, to extend the definition of charities and so get rid of this monstrous tax from the Highlands of Scotland.

Mr. J. Bruce-Gardyne: I am delighted to support this Amendment, which has been so ably moved by my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell) and supported by my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) in a most remarkable speech. [HoN. MEMBERS: "Hear, hear."] Right hon. and hon. Members on the Front Bench opposite may applaud, but they should study his words with care. The effect of the Bill will be to reduce large parts of Scotland to a condition of dependence on Government

charity, and this is a situation which we should all deplore.
My hon. Friend gave us a most useful and valuable definition of the meaning of "charity" and how it is to be interpreted under the law of Scotland. He explained how the Amendment could be used by the Secretary of State to save many of the areas of Scotland, particularly the Highlands, but also the North-East and the Borders, from the vicious effects of the tax. He reminded us, as did my hon. Friend the Member for Moray and Nairn, of the way in which fix tax discriminates against parts of Scotland which are already suffering depopulation and a level of unemployment substantially higher than the national average.
If the Government will accept the Amendment, as I feel satisfied they will, they can take a small step to mitigate the injustices perpetrated by the Bill on the people of Scotland. I join my hon. Friends in complaining at the disgraceful way in which we have been treated. This is the only Amendment dealing with the effect of the Bill on Scotland which the Government, by their guillotine procedure, have allowed us to discuss. I am a little surprised that the Secretary of State has the nerve to show himself in the Committee after the way the Government have treated it and, in particular, Members from Scottish constituencies.
I can see no good reason why the Government should reject the Amendment and I am confident that they will accept it. Perhaps there is one reason why they may feel a little worried. My hon. Friend the Member for Perth and East Perthshire told us that one of the meanings of charity is "deficiency of the required quality". I am afraid that that would apply to the whole Government Front Bench, and it may be that they would be reluctant to accept this Amendment for fear of themselves standing condemned by it. However, the people of Scotland would feel that the condemnation was entirely justified, particularly after the events of the past 24 hours.
It is somewhat depressing that we can have only this brief discussion on a limited aspect of the Bill, which impinges so heavily and so harshly on our


constituents and all the people of Scotland. If the Government would accept this modest Amendment and recognise that in this case at least the Secretary of State has some responsibility and duty to answer to the people of Scotland and that it is not entirely to be left to his right hon. Friend the Minister of Labour, it would be a very small concession in the right direction.
Like my hon. Friend the Member for Perth and East Perthshire, I am bound to say that I sometimes wonder whether we are better off with the Secretary of State than with the Minister of Labour. Clearly neither of them appreciates anything of the problems which Scotland faces as a result of the actions of the present Government. Certainly, if the Secretary of State appreciated them, he would not be sitting on that Front Bench at the moment.
He has a responsibility, and it is a responsibility which is defined in subsection (4) of this Clause, as my hon. Friend the Member for Moray and Nairn pointed out. I suggest that that responsibility should be extended to the whole of the Clause. A number of my hon. Friends wish to press the point, because it is one of not minimal importance to the people of Scotland—[Interruption.] The Financial Secretary laughs. He has a Scots name, but he knows nothing of the mood and temper of the people of Scotland.

Mr. MacDermot: For the information of the hon. Gentleman, I have not got a Scottish name.

Mr. Bruce-Gardyne: That explains a great deal. If the hon. and learned Gentleman is an Irishman, it explains many of his attitudes throughout the sittings of this Committee. [HON. MEMBERS: "Oh."] I am delighted to realise that we do not have a renegade Scot committing these offences against the people of Scotland.

Mr. Thomas Steele: I am not sure whether or not the hon. Member for South Angus (Mr. Bruce-Gardyne) was educated in Scotland—

The Secretary of State for Scotland (Mr. William Ross): He was not.

Mr. Steele: Those of us who were educated in Scotland are not concerned whether it is the Minister of Labour or the Secretary of State who gives us the money, so long as we get the money.

Mr. Bruce-Gardyne: All that I can say to the hon. Member for Dunbartonshire, West (Mr. Steele) is that if he seriously thinks that Scotland is going to get the money under the Bill, he had better look at some of the exchanges which we have had on the matter.

Mr. Steele: Like some of his hon. Friends, the hon. Gentleman is not dealing with the Amendment at all. He is dealing with the Bill.

The Temporary Chairman (Mr. J. C. Jennings): Order. That is an implied criticism of the Chair, and, having himself been in the Chair many times, the hon. Member for Dunbartonshire, West (Mr. Steele) should know it. Until now, there has been nothing out of order, although hon. Gentlemen on both sides of the Committee have tended to get on to the fringe. I am listening very carefully, and I think that we ought to get away from the fringe and back to the meat of the Amendment. I would remind hon. Gentlemen that we are dealing with the second Amendment, No. 147, as well. That allows us to deal with these Scottish problems. Can we now get on?

Mr. Steele: I apologise to the Chair. I am the last person in the world to criticise the Chair. When I was in the Chair this morning upstairs, I had to draw the attention of the hon. Member for South Angus to a similar point. May I pay tribute to hon. Members for being on the fringe?

The Temporary Chairman: It is a qualified regret, and I accept it as such.

10.15 p.m.

Mr. Bruce-Gardyne: I think that we have all learnt something from this exchange, because the important point is that there is a great deal of indignation among my hon. Friends about the way in which Scotland has been treated throughout the discussions on this Bill, and this inevitably leads some of us to approach the margins of disorder in trying to discuss the Amendment.
Hon. Gentlemen opposite continue to regard this as a joke. They may find


that it is regarded as a good deal less of a joke by their constituents, and by the people of Scotland as a whole.
Before the hon. Member for Dunbartonshire, West tried to lay down the rules of order, I was saying that a number of my hon. Friends wished to address the Committee on this Amendment. I feel that we need to stress how important it is that the Government should at least give some sign of understanding the deep feelings and deep resentment which have been built up throughout Scotland as a result of this Bill, and this tax, by making the small concession of granting us this Amendment.

Mr. Patrick Wolrige-Gordon: One of the saddest results of the Government's handling of the Bill is that this Amendment provides the only chance which Scottish Members on this side of the Committee who care about the effect of the tax on Scotland have to discuss the position at all. It is not through any wish to stray on the fringes of order that some of my hon. Friends have made some of the points which they have been forced to make. What we are concerned about is not so much how Scotland is treated in this debate, but the effects of this tax on Scotland.

Mr. Archie Manuel: The hon. Gentleman is usually very fair. Would not he agree that because most of the time on previous Amendments has been hogged by his English colleagues, there has not been enough time to bring in the Scottish Amendment?

Mr. Wolrige-Gordon: The hon. Gentleman and his right hon. and hon. Friends spent until about 6 o'clock the other morning making sure that we would not have sufficient time to discuss these Amendments.

The Temporary Chairman: Order. Let us forget past debates, and deal with this one. I must ask the hon. Member to keep to the Amendment.

Mr. Wolrige-Gordon: I just wanted to say that the Amendment comes after the measures announced by the Prime Minister in the House yesterday, as a result of which we in Scotland find ourselves in a difficult situation. To all intents and purposes Scotland is a de-

velopment area. The Prime Minister said that the only exemption to be made to these measures in Scotland was in respect of building control.

The Temporary Chairman: Order. So far, I have been very generous with the interventions of hon. Members on both sides of the Committee. I wish that they would remember what the Amendment is about. It substitutes "appropriate Minister" for "Minister of Labour". The hon. Member can show ingenuity in making his various points if he relates them to those words, but he is straying far wide of the mark in talking about building controls and yesterday's speech by the Prime Minister. I hope that he will address himself to the two Amendments and to the words "appropriate Minister".

Mr. MacArthur: I do not want to question your Ruling, Mr. Jennings, but my hon. Friend has referred to the scarcity of buildings in the Highlands under the Government. Is it not in order for him to do so, as an extension of the argument which I advanced, without any question of control at all, about the definition of the word "poverty" and its application to the Amendment, which deals with charities in Scotland?

The Temporary Chairman: I appreciate the point that the hon. Gentleman makes, but by no stretch of the imagination can I regard building control as a charity.

Mr. Wolrige-Gordon: I was merely trying to point out that if these measures are put into effect the whole of Scotland will be in need of charity, and in that event the validity of my argument becomes all the more obvious, because who can we expect to administer such charity, apart from the Secretary of State? That is his job. I am sorry to have to leave that point, because I believe that the Prime Minister misled us seriously in respect of the earlier Measure. Now we come back to the Selective Employment Tax, which will affect development areas in Scotland to a far greater extent, in proportion, than it will other parts of the country. That is the real reason for the feeling that exists on this side of the Committee about the Measure, and that is the reason why we are using any opportunity we can to bring the situation to the attention of the Committee.

Mr. Edward M. Taylor: How significant it is, on this one occasion we have of discussing a narrow Amendment, to see the Secretary of State for Scotland almost deserted by his hon. Friends while on this side, as usual, almost every Scottish Conservative Member is standing up and fighting against the empty Government benches in support of the real interests of Scotland. This is a narrow Amendment, concerned only with the question whether we shall transfer certain functions from the Minister of Labour to the Secretary of State for Scotland—

Mr. Bruce-Gardyne: On a point of order. I distinctly heard the hon. Member for Central Ayrshire (Mr. Manuel) call my hon. Friend a liar. Is this Parliamentary language?

The Temporary Chairman: I was certainly very deaf, and I can sincerely say that I heard nobody use the word "liar."

Mr. Taylor: Many Members on this side of the Committee—[Interruption.]

The Temporary Chairman: Order. Let us get on with the debate in a seemly fashion. I cannot hear what is said.

Mr. Taylor: Hon. Members opposite may wonder why Members of the Scottish Unionist Party suggest transferring certain functions from the Minister of Labour to the Secretary of State for Scotland, in view of that right hon. Gentleman's appalling record. He is a Secretary of State under whose leadership we have a slump in house building, savage reductions in educational building, an increase in petrol tax and vehicle licence duty—and now the Selective Employment Tax, which hits Scotland particularly hard, and especially those areas in special need.
Considering the Amendment, hon. Members will ask themselves why we are suggesting giving more power to this person, this Government, who have brought so much trouble to Scotland and who promise to bring so much more in the future. Even if we consider the narrow question of emigration, we see that the Government, who pleaded with us to try to stop the drift of people from Scotland, in their first year in office have caused a dramatic increase to 43,000, with the promise of an even greater figure in the future.
Hon. Members will ask themselves, why do we propose further to extend the powers—

Mr. Ernest Armstrong: On a point of order. Would it not assist the Committee if the hon. Gentleman told us to which Amendment he was speaking and whether he is in favour of it or not?

The Temporary Chairman: It is quite clearly defined which Amendment we are discussing. If the implication is that the hon. Member it out of order, I must say that he is not. He has related his last five sentences to one immediately preceding them on the question of the Secretary of State for Scotland being an appropriate person. At the moment, he is in order.

Mr. Taylor: I am addressing myself to the Amendment which deals with this specific point.
We may be asked why we propose to transfer more power to a Secretary of State who has wreaked such havoc in Scotland in so short a time. We have the new problem of investment grants which are far less favourable in Scotland than the old investment allowances. Time and time again—

The Temporary Chairman: Order. There is no relation between this sentence on investment grants and the premise which the hon. Gentleman enunciated about six or seven sentences ago. Investment grants on this occasion are out of order.

Mr. MacArthur: On a point of order. May I call your attention, Mr. Jennings, to the fact that 40 Scottish Labour Members are absent?

The Temporary Chairman: The hon. Gentleman cannot get away with that one. It is a bogus point of order. Time after time, hon. Members have been told not to raise such points of order to gain party points. I hope that there will be no repetition of this practice.

Mr. Taylor: This is, of course, a very serious Amendment and I will stick strictly to it.
There are many such examples when we consider the Amendment. If we are considering the possibility of transferring


even more powers to the Secretary of State, hon. Members on both sides will ask themselves, "Why should we support Amendment No. 146 when the Secretary of State has done so much damage to Scotland with the powers he already has?"
Despite this feeling throughout the Committee, and despite the fact that hon. Members say that we must give no more powers, to this dreadful man, there are compelling reasons for accepting the Amendment. By all means let us take from the Secretary of State his powers over housing, education and finance, but let us at least give him powers in the narrow field of charities, because this is right and proper. In Scotland, the definition of a charity is different under the Income Tax Acts. It is far more difficult to be accepted as a charity in Scotland than in England.
One real problem which will emerge is the treatment of closed workshops—

Mr. Armstrong: On a point of order. Would the hon. Gentleman inform the Committee whether, if the Government were to accept the Amendment, he would insist on being paid in Scottish currency? Or would he accept English?

Mr. Taylor: Our real concern at the moment is whether our British currency has any value at all.
Closed workshops in Scotland have difficulty in being accepted as charities. They do worthwhile work in providing employment, a real life and hope for the future, in the West of Scotland to almost 500 people who are blind or suffering from epilepsy or other diseases. I hope that at least these organisations will be accepted as charities, even if they are limited companies making profits. They do good work.
I hope that, with the help and experience of the people in the Scottish Office, who were formerly under the guidance of the previous Conservative Government, these charities will receive sympathetic treatment. So Mr. Jennings, while you and others may say, "Why should we give even more power to a Government who have failed Scotland so disastrously, and, in particular, to a Secretary of State who has personally failed Scotland so abysmally?" I feel that on this narrow point, despite their dismal record, there is a case for approving this Amendment, and I hope that the Committee will do so.

10.30 p.m.

Earl of Dalkeith: There is one very important aspect of this Amendment which has not as yet been touched upon. If the Government were to refuse to accept the Amendment, it would be reversing the processes of devolution which have been carried out by Conservative Governments over many years. Instead of giving powers to the Secretary of State for Scotland, they would be insisting that the Ministry of Labour, which is a London-based Ministry, should carry out the process of repaying this money to charities.
For this reason, I am sure that the Secretary of State—who has not got enough to do, anyway—will be very anxious to persuade the Financial Secretary to accept the Amendment. As I say, the Secretary of State is not over-engaged at the present time, judging by the lack of positive new thinking which is coming out of the Scottish Office.
On the other hand, let us remember that the Ministry of Labour will be very heavily engaged over the months to come with, I regret to say, the obviously increasing amount of unemployment which is bound to affect Scotland. I therefore urge that, for administrative reasons, there is a very good argument indeed for the Government to accept the Amendment, and I hope they will do so.

Mr. Gower: It will not have passed the notice of hon. Members that this Agreement refers also to Wales, and seeks to give to the Secretary of State for Wales a power similar to that which is sought to be given to Scotland. I am glad that the Minister of State, Welsh Office is here tonight.
It is, indeed, a great pity that we are reduced to this very narrow Amendment to express our apprehensions and axieties about the effect of this fearful, dreadful tax on certain parts of the United Kingdom. It is also a pity that we did not have considerably more time in which to deal with the effect on Scotland and Wales. We could have done with three days to discuss the effect on the County of Kent alone, or any other county in the United Kingdom.
Every argument adduced so well by my hon. Friend the Member for Perth and

East Perthshire (Mr. MacArthur) could be related to the rural areas of North and Central Wales. They apply almost equally, and the effects of this tax in those areas will be very similar to the effects described by him. I agree with my hon. Friend that there will be a dearth, a shortage, indeed a lack of development. There is bound to be. The impact of this tax on those areas is certain to be really serious. I cannot understand why the Government are not aware of this.
One thing is certain, at any rate. If my hon. Friend's worst fears are realised, in Scotland, and indeed in Wales too, there will be a proliferation of charities. There will be a great need for charities, and I am sure that it would be better if the working of these charities were supervised by the Secretary of State for Wales and the Secretary of State for Scotland.

Mr. David Steel: I have been deeply touched by some of the speeches that I have heard tonight from Scottish Conservative Members—not least that of one of my constituents, the noble Lord the Member for Edinburgh, North (Earl of Dalkeith). [Interruption.]

The Temporary Chairman (Mr. J. C. Jennings): Order. This chit-chat across the Floor of the Committee prevents hon. Members from hearing the debate.

Mr. Steel: Thank you, Mr. Jennings.
I was particularly struck by the speech of the noble Lord, the Member for Edinburgh, North, who is usually one of my more troublesome constituents. I propose to invite him at the next election to speak on my platform in favour of Scottish devolution, having heard what he has had to say tonight.
It is unfortunate that the timetabling of Amendments has meant that we are not given an opportunity to discuss the wider issues of S.E.T. and what it will mean to Scotland. I hope that we may be able to rectify this through the machinery of the Scottish Grand Committee before the end of the Session. In this connection, I asked a Question on 11th July about the effect of S.E.T. on the


development areas, remembering that Scotland is mainly a development area. The hon. Lady the Parliamentary Secretary to the Ministry of Labour, who I am glad to see in her place, replied:
 Perhaps the hon. Gentleman would be kind enough to await the discussion on the Amendment to the Bill when it arises?"—[OFFICIAL REPORT, 11th July, 1966; Vol. 731, c. 961.)
I have been kind enough to wait and I am still kindly waiting, but that Amendment has not arisen.
There is a serious intent behind the Amendment before the Committee, an intent which has got somewhat lost in the welter of wider speeches. There is a case for saying that, because of the difference between charities in England and Scotland, this Amendment should be accepted.

Mr. MacDermot: If any justification were required for the placing on the Order Paper of the procedure Motion in relation to this Measure, I suggest that the last hour's debate provided it. [HoN. MEMBERS: "Withdraw."] I will not withdraw. I will justify. It is entirely a matter for hon. Gentlemen opposite how they choose to spend the time available to them as a result of the procedure Motion. It is illuminating to think that they have considered it right to spend one hour on a fringe debate without once adducing any argument in support of the Amendment for which they are supposed to be arguing. That is not surprising, because it is not an Amendment for which one could adduce any argument, for if it were accepted one would be accepting a nonsense.

Mr. G. Campbell: I do not know whether the hon. and learned Gentleman was here when I moved the Amendment, but I moved it briefly and very much to the point.

Mr. MacDermot: It is a free country and every man is entitled to his opinion. I was here. I heard every word of the hon. Gentleman's speech. It was brief, forceful, vehement but, I am afraid, it was not to the point. He did not adduce any arguments to show how one Scotsman or Welshman would benefit in the slightest if we accepted it. I will show why none would and why it would considerably slow up the whole administrative process if it were accepted.
To reply to the arguments that have been adduced, I suggest that this seems to have been the most apt kind of debate to have had on the day when, for the first time, we have a Welsh Nationalist taking his seat in the House of Commons, for the arguments have been purely nationalistic, without any reasons having been given to show how anyone would benefit.
The noble Lord the Member for Edinburgh, North (Earl of Dalkeith) said that if we accepted the Amendment there would be an administrative advantage as a result of devolution to the Secretary of State for Scotland and the Secretary of State for Wales. At least he got to the point, which no other hon. Gentleman opposite did the point being that the Amendment deals with administrative procedure, and nothing else. Many hon. Gentlemen were talking as if the power of deciding what were or what were not charities was being taken out of the hands of the Secretary of State for Scotland and, in some way, being conferred on the Minister of Labour. That shows that they have not read the Clause we are discussing. It is, in fact, expressly provided in subsection (4) that the power of deciding for the "purpose of this section" and of certifying what is and what is not a charity will rest with none other than my right hon. Friend the Secretary of State for Scotland.
The hon. Member for Perth and East Perthshire (Mr. MacArthur), in his very vehement contribution, suggested that the Secretary of State was the person who was more able to identify charities in Scotland. That is precisely what the Bill provides for, and what subsection (4) provides for, and there is nothing whatever in the Amendment that touches on or deals in any way with the identification of charities.
It is true that the law of Scotland is different from the laws of England as to the meaning of "charity"—the hon. Member brought some very large tomes with him to demonstrate that—but I am sorry to have to tell him that the fact is that the Scots, being a canny people, have a narrower definition of "charity" than have the English. We, being a charitable Government, therefore thought that it would be right in this case to apply the English definition of "charity", and


so ensure that Scotsmen would not be deprived of the benefit of refunds which would be available to Englishmen by being confined within the narrow, strict straitjacket of the Scottish definition of "charity".
We therefore provided that the meaning of "charity" contained in the Income Tax Act should apply, but in order to ensure that no Scotsman should feel that the English wool was being pulled over his eyes, we provided that it would be the Secretary of State for Scotland who would certify and determine which were the charities which complied with the definition, and it is thereby his responsibility to confer that benefit upon Scotsmen.
But, turning to the Amendment—if it is not thought improper—to argue the Amendment itself—what the Amendment deals with, and nothing else, is which Minister should be responsible for the refunds to charities in Scotland and Wales —that, and nothing else. In other words, the Secretary of State having decided in Scotland which are the charities, which is the more convenient machinery for repayment?
I was interested that the right hon. Gentleman the Member for Argyll (Mr. Noble), whose name appears at the top of the list of hon. Members in support of this Amendment, has not yet told us—perhaps we shall hear him in reply, and I shall be very interested to hear him—how he, with his experience as a Secretary of State for Scotland, thinks there would be some administrative advantage in accepting the Amendment.
The fact is that these payments will be made in respect of charitable establishments scattered over different parts of the country—Scotland and Wales, as we are concerned with here. The Secretary of State for Scotland does not have sufficiently devolved machinery to discharge this administrative function conveniently. The Ministry of Labour has. It has not merely regional offices but local, sub-regional offices, and it has the machinery available. It will be dealing in all other spheres with the whole procedure of the premium payments and the refunds. The additional administrative task of examining the applications, examining the claims that are made on behalf of the charities and, when established, making repayments to them, will be a very small

addition to the burden which that Ministry will already be carrying in respect of all other repayments—

Earl of Dalkeith: Will not the hon. and learned Gentleman agree that the Ministry of Labour will be very preoccupied in the coming months with dealing with problems of increasing unemployment? Has this been taken into account?

10.45 p.m.

Mr. MacDermot: The Ministry of Labour will be dealing with the whole administration of this Bill when it becomes law. There is nothing to be gained when we have one lot of officials who have the necessary local offices all over the country and are making premium payments and refunds already to everyone within the scope of the Clauses we have been discussing, suddenly to single out charities and to say, "Here is a class of refunds for which we shall use entirely different machinery—which does not exist, but we shall have to set it up specially for the purpose". I hope that hon. Members see now why at the outset I was justified in saying that what the Committee is being asked to accept is a nonsense, an administrative nonsense.
For its application to Wales there is even less argument that can be adduced. Exactly the same administrative arguments apply, but there is not even a question here of a separate law or any need to certify in regard to Wales which are and which are not charities, because the law of Wales is the same as the law of England. There is no problem or difficulty. For those charities which are established there is exactly the same machinery in Wales as for those in England.
If the Amendment were accepted it would be necessary, as subsection (3) makes quite clear, quite artificially to introduce a definition of what are Welsh charities as opposed to English charities, a definition which is wholly unnecessary for any administrative purpose connected with the Bill and I do not imagine that it would do anything to satisfy any national aspirations which any Welshmen might have. As was pointed out by one of my hon. Friends, once the right to payment has been established, all that they would be interested in would be receiving the refund at the earliest possible moment. No doubt they would do that by using the machinery of the Ministry of Labour.

Mr. Michael Noble: There was at one time a school of theological thought which debated for a considerable length of time how many angels could sit on the point of a pin. I do not know whether it was the result of this or the kindness of you, Mr. Jennings, or the elasticity of your imagination in the Chair which allowed so many of my hon. Friends to speak with great feeling on a very narrow Amendment. The Financial Secretary, who declared himself to be an Irishman, has used an argument as tortuous as any which he criticised my hon. Friends for using. He tried to argue that this was a perfect example of how necessary it was for a timetable to be imposed on this Bill. He must know in his heart that the only reason why this debate has taken over an hour is that this is the only occasion on which many Scotsmen who feel extremely strongly about this Bill have any opportunity of discussing these points in Committee.

Mr. MacDermot: I do not follow this argument. Are Scotsmen only to argue in the interests of their constituents if the debate is confined solely to Scotland? Can they not argue the Scottish aspect of all the other matters?

Mr. Noble: It is perfectly true that Scottish Members can talk for as long as they are able under this very tight Guillotine on problems of agriculture, laundries, Mrs. Mopps, charities and the rest, but—as the Financial Secretary may not have taken the trouble to find —there are several Amendments dealing specifically with the problems of the Highlands and Islands—problems which have come to the Highlands and Islands because of the shipping strike—and other matters which could not have been brought within the rules of order in this debate.
The whole argument on the benches opposite in this debate was summed up with brutal accuracy by the hon. Member for Dunbartonshire, West (Mr. Steele) when he said that he did not care whether the Ministry of Labour looked after this Scottish matter or any other Ministry so long as they got the money. This is perhaps the greatest failure—and it is being daily shown to be a failure—of the Government if they believe that Scotsmen do not care who looks after

them so long as they get the money. We have for many years rightly had the feeling that the Secretary of State for Scotland should look after Scottish matters. If that is not the hon. and learned Gentleman's view he should say so.
The Financial Secretary went on to say that he did not see that any Scotsmen or Welshman would benefit and therefore the administration should be done by the Minister of Labour. Is it a new theory that it is administratively right for people to be looked after by a Minister only if they benefit from his action? If so, I do not believe that the hon. and learned Gentleman would deny that Scottish universities are of benefit to a great many Scotsmen. In that case, why does not the Secretary of State administer them? The hon. and learned Gentleman's argument is a nonsense and he knows it.
Then the hon. and learned Gentleman said—and I do not accept this—that the only point of the Amendment is that the Secretary of State could certify what is a charity and what is not, with the Minister of Labour responsible for payment. Is there any reason why Scottish charities, which are not all small—some are big, like the Church of Scotland and the National Trust—should not go to the Scottish Office for payment, which would be very much easier than going to labour exchanges and asking various points.
The hon. and learned Gentleman said that if the Amendment were accepted it would be an administrative nonsense. The whole tax is an administrative nonsense. In any case, it is an insult for the hon. and learned Gentleman to suggest that something that would be run by the Secretary of State for Scotland would be an administrative nonsense. It need never have been in the days when I was Secretary of State. [Laughter.] I can well understand hon. Members opposite laughing. They have had a very satisfactory run on the Committee stage because they have succeeded in entirely gagging Scottish Members on many things they wanted to discuss.
I remember that distinguished Englishman, the Minister of State, Scottish Office, using every conceivable opportunity for hours on end in order to press particular points that he wanted—always, of course, with the acceptance of the Chair that


he was, as you put it, Mr. Jennings, on the fringe of order. I do not think that any Scotsmen would mind if the Minister of State took part in handling the question of charities, for he is the next down in rank at the Scottish Office.
It is not for me, perhaps, being without so much personal knowledge, to argue the case for Wales but the Minister of State, Welsh Office, is here. Earlier, when one of my hon. Friends said he believed the Government should accept the Amendment, I heard the Minister of State say, "If you will believe that, you will believe anything."
I cannot tell what sort of mess the Welsh Office is in. It may well be in a state of administrative muddle which would delight the heart of the Financial Secretary, for that was his only argument for rejecting the Amendment. If that is so, I am sure that the Minister of State is perfectly competent to get up and admit it. He is a frank and honest person of a very charitable nature and if that is the state of the Welsh Office he should tell the House so.
There are obvious reservations and they were well expressed by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). There were real worries in the minds of several people as to whether it was right to put on the Secretary of State for Scotland the extra work that might be entailed by this comparatively small addition to his many duties. I am a charitable person, too, and I believe that he would just manage to do that without making any great inroads in the period of leisure which he apparently has in dealing with Scottish affairs.
This has been a serious debate, at least in its underlying tone. The position, which is agreed upon by hon. Members on both sides of the Committee, is that Scotland has very real problems in coping with this tax, in addition to all the other things which have happened. I do not not believe or accept one word of the arguments put forward by the Financial Secretary. [Interruption.]I have replied to the only three points he made.—[An HON. MEMBER: "A poor reply."]—It is not nearly such a poor reply as the Minister of State is a poor Minister of State. It is perfectly possible and right for the Government to accept this Amendment

and in this small way to demonstrate that they do care for Scotland, because Scotland cares very much about who looks after its interests. If the Government will not accept the Amendment I must ask my hon. and right hon. Friends to divide the Committee.

Mr. Russell Johnston: I would say, Mr. Jennings, that beyond the fringe was not an unreasonable place to be this evening. I will not delay the Committee for any time, but when I heard the right hon. Gentleman the Member for Argyll (Mr. Noble) stand up and say that this has been a serious debate I thought that it was an appalling statement.

Mr. Noble: rose—

Mr. Johnston: I will not give way just now. I will give way in a moment, when I have finished the point that I am making. I quite accept the argument which has been put, to the effect that S.E.T. will do considerable harm to Scotland and the Scottish economy. I do not accept that it is a sensible tax and I accept that it is administrative nonsense in many ways. I do not think that the most effective way to deal with this is to pile nonsense upon nonsense, which is what the Scottish Unionist Members have been doing tonight. There is no doubt of this. I will now let the right hon. Gentleman intervene.

Mr. Noble: I am grateful to the hon. Gentleman for his rather curious way of giving way to me. He has admitted that this is a very serious problem for Scotland. He agrees that we have had no opportunity of discussing Scottish affairs. Is he denying that the hon. Gentlemen who have spoken, and his hon. Friends, were not doing so because they wanted to express in a comparatively short time their feelings about this? If this is the only method of doing it, does he not agree that this is right? [HON. MEMBERS: "Withdraw."]

Mr. Johnston: I will not withdraw anything. What I complained and still complain about, is that we have gone rather wide on what was said to be a very narrow Amendment and if one goes wide, or towards the fringe, I would have thought that a real attempt would have been made to present the case seriously. Sitting here, looking at the


smiling faces of that cherubic pair, the Secretary of State and the Minister of State, it was quite clear, as it was to most hon. Members, that the case being made by the former Secretary of State and his hon. Friends, was not being made seriously, and that it damaged the very real criticisms there are of this tax in Scotland. I want no part in this sort of argument or this sort of criticism—[HON. MEMBERS:" Sit down."]—nor

would I ask my hon. Friends to vote in support of an Amendment which was very rightly criticised as an administrative nonsense. I will not see administative nonsense piled upon nonsense.

Question put, That the words "Minister of Labour" stand part of the Clause:

The Committee divided: Ayes 286, Noes 219.

Division No. 143.]
AYES
[11.0 p.m.


Abse, Leo
Dewar, Donald
Jeger, George (Goole)


AIWA, Austen
Diamond, Rt. Hn. John
Jeger,Mrs.Lena(H'b'n—St.P'cras,S.)


Allaun, Frank (Salford, E.)
Dickens, James
Jenkins, Rt.Hn. Roy (Stechtord)


Alldritt, Walter
Dobson, Ray
Johnson, Carol (Lewisham, S.)


Allen, Scholefield
Doig, Peter
Johnson, James (K'ston-on-Hull, W.)


Anderson, Donald
Donnelly, Desmond
Johnston, Russell (Inverness)


Archer, Peter
Driberg, Tom
Jones, Dan (Burnley)


Armstrong, Ernest
Dunn, James A.
Jones, J. Idwal (Wrexham)


Ashley, Jack
Dunnett, Jack
Judd, Frank


Atkins, Ronald (Preston, N.)
Dunwoody, Mrs. Cwyneth (Exeter)
Kelley, Richard


Atkinson, Norman (Tottenham)
Dunwoody, Or. John (F'th — C'b'e)
Kenyon, Clifford


Bacon, Fit. Hn. Alice
Eadie, Alex
Kerr, Mrs. Anne (R'ter — Chatham)


Bagier, Cordon A. T.
Edelman, Maurice
Kerr, Russell (Feitham)


Barnett, Joel
Edwards, Robert (Bilston)
Lawson, George


Beaney, Alan
Edwards, William (Merioneth)
Leadbitter, Ted


Bellengor, Rt. Hn. F. J.
Ellis, John
Ledger, Ron


Bence, Cyril
English, Michael
Lee, Rt. Hn. Frederick (Newton)


Bann, lit. Hn. Anthony Wedgwood
Ennals, David
Lee, Rt. Hn. Jennie (Cannock)


Bennett, James (C'gow, Bridgeton)
Ensor, David
Lee, John (Reading)


Bidwell, Sydney
Evans, Albert (Islington, S.W.)
Lestor, Miss Joan


Binns, John
Finch, Harold
Lever, L. M. (Ardwick)


Bishop, E. S.
Fitch, Alan (Wigan)
Lewis, Arthur (W. Ham, N.)


Blackburn, F.
Fletcher, Raymond (Ilkeston)
Lewis, Ron (Carlisle)


Blenkinsop, Arthur
Fletcher, Ted (Darlington)
Lomas, Kenneth


Boardman, H.
Floud, Bernard
Loughlin, Charles


Booth, Albert
Foley, Maurice
Luard, Evan


Boston, Terence
Foot, Sir Dingle (Ipswich)
Lyon, Alexander W. (York)


Bottomley, Rt. Hn. Arthur
Foot, Michael (Ebbw Vale)
Lyons, Edward (Bradford, E.)


Bowden, Rt. Hn. Herbert
Ford, Ben
McCann, John


Braddock, Mrs. E. M.
Forrester, John
MacColl, James


Bradley, Tom
Fowler, Gerry
MacDermot, Niall


Bray, Dr. Jeremy
Gardner, A. J.
Macdonald, A. H.


Brooks, Edwin
Garrow, Alex
McGuire, Michael


Broughton, Dr. A. D. D.
Ginsburg, David
Mackenzie,Alasdair(Ross—Crom'ty)


Brown, Hugh D. (G'gow, Proven)
Gordon Walker, Rt. Hn. P. C.
Maclennan, Robert


Brown, Bob (N'c'tle-upon-Tyne,W.)
Gray, Dr. Hugh (Yarmouth)
McMillan, Tom (Glasgow, C )


Brown, R. W. (Shoreditch — F'bury)
Greenwood, Rt. Hn. Anthony
McNamara, J. Kevin


Buchan, Norman
Gregory, Arnold
MacPherson, Malcolm


Buchanan, Richard (G'gow, Sp'burn)
Grey, Charles (Durham)
Mahon, Peter (Preston, 8.)


Butler, Herbert (Hackney, C.)
Griffiths, David (Rother Valley)
Mallatieu,J.P.W.(Huddersfield,E.)


Butler, Mrs. Joyce (Wood Green)
Griffiths, Wills (Exchange)
Mapp, Charles


Cant, R. B.
Hamilton, James (Bothwell)
Marquand, David


Carmichael, Neil
Hamilton, William (Fife, W.)
Marsh, Rt. Hn. Richard


Carter-Jones, Lewis
Hamling, William
Mason, Roy


Chapman, Donald
Hannan, William
Maxwell, Robert


Coe, Denis
Harper, Joseph
Mayhew, Christopher


Coleman, Donald
Harrison, Walter (Wakefield)
Mendelson, J. J.


Concannon, J. D.
Hart, Mrs. Judith
Millan, Bruce


Conlan, Bernard
Hazell, Bert
Miller, Dr. M. S.


Corbel, Mrs. Freda
Heffer, Eric S.
Mitchell, R. C. (S'th'pton, Test)


Craddock, George (Bradford, 8.)
Henig, Stanley
Morgan, Elystan (Cardiganshire)


Crawshaw, Richard
Hilton, W. S.
Morris, Alfred (Wythenshawe)


Cronin, John
Hooley, Frank
Morris, Charles R. (Openshaw)


Crosland, Rt. Hn. Anthony
Hopson, Emlyn
Morris, John (Aberavon)


Cullen, Mrs. Alice
Homer, John
Moyle, Roland


Dalyell, Tam
Houghton, Rt. Hn. Douglas
Mulley, Rt. Hn. Frederick


Davidson, Arthur (Accrington)
Howarth, Harry (Wellingborough)
Neal, Harold


Davies, Dr. Ernest (Stretford)
Howarth, Robert (Bolton, E.)
Newens, Stan


Davies, G. Eifel (Rhondda, E.)
Howie, W.
Noel-Baker, Francis (Swindon)


Davies, Ednyfed Hudson (Conway)
Hoy, James
Norwood, Christopher


Davies, Harold (Leek)
Hughes, Hector (Aberdeen, N.)
Oakes, Gordon


Davies, Robert (Cambridge)
Hunter, Adam
Ogden, Eric


de Freitas, Sir Geoffrey
Hynd, John
O'Malley, Brian


Delargy, Hugh
Irvine, A. J. (Edge Hill)
Orbach, Maurice


Dell, Edmund
Jackson, Colin (B'h'se — Spenb'gh)
Orme, Stanley


Dempsey, James
Jackson, Peter M. (High Peak)
Oswald, Thomas




Owen, Dr. David (Plymouth, S'tn)




Page, Derek (King's Lynn)
Rose, Paul
Varley, Eric G.


Paget, R. T.
Ross, Rt. Hn. William
Wainwright, Edwin (Dearne Valley)


Palmer, Arthur
Rowland, Christopher (Meriden)
Walden, Brian (Ali Saints)


Pardoe, John
Rowlands, E. (Cardiff, N.)
Walker, Harold (Doncaster)


Parkyn, Brian (Bedford)
Shaw, Arnold (Ilford, S.)
Wallace, George


Pearson, Arthur (Pontypridd)
Sheldon, Robert
Watkins, David (Consett)


Peart, Rt. Hn. Fred
Shinwell, Rt. Hn. E.
Weitzman, David


Pentland, Norman
Shore, Peter (Stepney)
Wellbeloved, James


Perry, Ernest G. (Battersea, S.)
Short,Rt.Hn.Edward(N'c'tle-u-Tyne)
Wells, William (Walsall, N.)


Perry, George H. (Nottingham, S.)
Silkin, S. C. (Dulwich)
Whitaker, Ben


Prentice, Rt. Hn. R. E.
Silverman, Julius (Aston)
White, Mrs. Eirene


Price, Christopher (Perry Bar)
Skeffington, Arthur
Whitlock, William


Price, Thomas (Westhoughton)
Slater, Joseph
Wigg, Rt. Hn. George


Price, William (Rugby)
Small, William
Willey, Rt. Hn. Frederick


Probert, Arthur
Snow, Julian
William, Alan (Swansea, W.)


Pursey, Cmdr. Harry
Spriggs, Leslie
Williams, Alan Lee (Hornchurch)


Rankin, John
Steel, David (Roxburgh)
Williams, Clifford (Abertillery)


Redhead, Edward
Stewart, Rt. Hn. Michael
Williams, Mrs. Shirley (Hitchin)


Rees, Merlyn
Stonehouse, John
Williams, W. T. (Warrington)


Reynolds, G. W.
Strauss, Rt. Hn. G. R.
Willis, George (Edinburgh, E.)


Rhodes, Geoffrey
Summerskill, Hn. Dr. Shirley
Wilson, William (Coventry, S.)


Richard, Ivor
Swain, Thomas
W inriick, David


Roberts, Albert (Normanton)
Swingler, Stephen
Winterbottom, R. E.


Roberts, Coronwy (Caernarvon)
Taverne, Dick
Woof, Robert


Roberts, Gwilym (Bedfordshire, S.)
Thomas, George (Cardiff, W.)
Wyatt, Woodrow


Robertson, John (Paisley)
Thomas. Iorwerth (Rhondda, W.)
Yates, Victor


Robinson,Rt.Hn.Kenneth(St.P'c'as)
Thomson, Rt. Hn. George



Robinson, W. 0. J. (Walth'stow E.)
Tinn, James
TELLERS FOR THE AYES:


Rodgers, William (Stockton)
Tomney, Frank
Mr. Gourlay and


Roebuck, Roy
Urwin, T. W.
Mr. Ioan L. Evans.


Rogers, George






NOES


Alison, Michael (Barkston Ash)
d'Avigdor-Goldsmid, Sir Henry
Hill, J. E. B


Allason, James (Hemel Hempstead)
Dean, Paul (Somerset, N.)
Hirst, Geoffrey


Astor, John
Deedes, Rt. Hn. W. F. (Ashford)
Hobson, Rt. Hn. Sir John


Atkins, Humphrey (M't'n — M'd'n)
Digby, Simon Wingfield
Hogg, Rt. Hn. Quintin


Awdry, Daniel
Dodds-Parker, Douglas
Holland, Philip


Baker, W. H. K.
Doughty, Charles
Hordern, Peter


Balniel, Lord
Douglas-Home, Rt. Hn. Sir Alec
Hornby, Richard


Barber, Rt. Hn. Anthony
Drayson, G. B.
Howell, David (Guildford)


Batsford, Brian
du Cann, Rt. Hn. Edward
Hunt, John


Beamish, Col. Sir Tufton
Eden, Sir John
Iremonger, T. L.


Bell, Ronald
Elliot, Capt. Walter (Carshalton)
Irvine, Bryant Godman (Rye)


Bennett, Sir Frederic (Torquay)
Elliott, R.W.(N'ctle-upon-Tyne,N.)
Jenkin, Patrick (Woodford)


Berry, Hn. Anthony
Errington, Sir Eric
Johnson Smith, G. (E. Grinstead)


Biffen, John
Evans, Gwynor (C'marthen)
Jones, Arthur (Northants, S.)


Birch, Rt. Hn. Nigel
Farr, John
Jopling, Michael


Black, Sir Cyril
Fisher, Nigel
Joseph, Rt. Hn. Sir Keith


Blaker, Peter
Fletcher-Cooke, Charles
Kerby, Capt. Henry


Body, Richard
Fortescue, Tim
Kershaw, Anthony


Bossom, Sir Clive
Foster, Sir John
Kimball, Marcus


Boyd-Carpenter, Rt. Hn. John
Galbraith, Hn. T. G.
King, Evelyn (Dorset, S.)


Boyle, Rt. Hn. Sir Edward
Gibson-Watt, David
Kitson, Timothy


Braine, Bernard
Giles, Rear-Adm. Morgan
Knight, Mrs. Jill


Brewis, John
Gilmour, Ian (Norfolk, C.)
Lancaster, Col. C. G.


Brinton, Sir Tatton
Gilmour, Sir John (Fife, E.)
Legge-Bourke, Sir Harry


Bromley-Davenport, Lt.Col.Sir Walter
Glover, Sir Douglas
Lewis, Kenneth (Rutland)


Brown, Sir Edward (Bath)
Glyn, Sir Richard
Lloyd,Rt. Hn. Geoffrey(Sut'nC'dfield)


Bruce-Gardyne, J.
Godber, Rt. Hn. J. B.
Lloyd, Rt. Hn. Selwyn (Wirral)


Bryan, Paul
Goodhart, Philip
Longden, Gilbert


Buck, Antony (Colchester)
Goodhew, Victor
Loveys, W. H.


Bullus, Sir Eric
Gower, Raymond
MacArthur, Ian


Campbell, Gordon
Grant, Anthony
Maclean, Sir Fitzroy


Carlisle, Mark
Grant-Ferris, R.
Macleod, Rt. Hn. Iain


Carr, Rt. Hn. Robert
Gresham Cooke, R.
McMaster, Stanley


Cary, Sir Robert
Griffiths, Eldon (Bury St. Edmunds)
Macmillan, Maurice (Farnham)


Channon, H. P. G.
Gurden, Harold
Maddan, Martin


Chichester-Clark, R.
Hall, John (Wycombe)
Maginnis, John E.


Clark, Henry
Hall-Davis, A. G. F.
Marples, Rt. Hn. Ernest


Clegg, Walter
Hamilton, Michael (Salisbury)
Marten, Neil


Cooke, Robert
Harris, Frederic (Croydon, N.W.)
Maude, Angus


Cooper-Key, Sir Neill
Harrison, Brian (Maldon)
Maudling, Rt. Hn. Reginald


Cordle, John
Harrison, Col. Sir Harwood (Eye)
Mawby, Ray


Corfield, F. V.
Harvey, Sir Arthur Vere
Maxwell-Hyslop, R. J.


Costain, A. P.
Hastings, Stephen
Maydon, Lt.-Cmdr. S. L. C.


Craddock, Sir Beresford (Spelthorne)
Hawkins, Paul
Mills, Peter (Torrington)


Crawley, Aldan
Hay, John
Mills, Stratton (Belfast, N.)


Crouch, David
Heald, Rt. Hn. Sir Lionel
Miscampbell, Norman


Crowder, F. P.
Heath, Rt. Hn. Edward
Mitchell, David (Basingtoke)


Currie, G. B. H.
Heseltine, Michael
Monro, Hector


Dalkeith, Earl of
Higgins, Terence L.
Morgan, W. G. (Denbigh)


Dance, James
Hiley, Joseph
Morrison, Charles (Devizes)







Mott-RadClyffe, Sir Charles
Rees-Davies, W. R.
Thatcher, Mrs. Margaret


Munro-Lucas-Tooth, Sir Hugh
Renton, Rt. Hn. Sir David
Tilney, John


Murton, Oscar
Ridley, Hn. Nicholas
Turton, Rt. Hn. R. H.


Nabarro, Sir Gerald
Ridsdale, Julian
van Straubenzee, W. R.


Neave, Airey
Rippon, Rt. Hn. Geoffrey
Vickers, Dame Joan


Nicholls, Sir Harmar
Rodgers, Sir John (Sevenoaks)
Walker, Peter (Worcester)


Noble, Rt. Hn. Michael
Rossi, Hugh (Hornsey)
Wall, Patrick


Nott, John
Russell, Sir Ronald
Walters, Dennis


Onslow, Cranley
Sandys, Rt. Hn. D.
Ward, Dame Irene


Orr, Capt. L. P. S.
Scott, Nicholas
Weatherill, Bernard


Orr-Ewing, Sir Ian
Sharpies, Richard
Webster, David


Osborn, John (Hallam)
Shaw, Michael (S'c'b'gh — Whitby)
Wells, John (Maidstone)


Page, Graham (Crosby)
Sinclair, Sir George
Whitelaw, William


Page, John (Harrow, W.)
Smith, John
Wills, Sir Gerald (Bridgwater)


Peel, John
Stainton, Keith
Wilson, Geoffrey (Truro)


Percival, Ian
Stoddart-Scott, Col, Sir M. (Ripon)
Wolrige-Gordon, Patrick


Pink, R. Bonner
Summers, Sir Spencer
Wood, Rt. Hn. Richard


Pounder, Rafton
Tapsell, Peter
Woodnutt, Mark


Powell, Rt. Hn. J. Enoch
Taylor, Sir Charles (Eastbourne)
Worsley, Marcus


Price, David (Eastleigh)
Taylor,Edward M.(G'gow,Cathcart)
Wylie, N. R.


Prior, J. M. L.
Taylor, Frank (Moss Side)
TELLERS FOR THE NOES:


Pym, Francis
Teeling, Sir William
Mr. More and Mr. Eyre.


Quennell, Miss J. M.
Temple, John M.



Rawlinson, Rt. Hn. Sir Peter

Mr. John Pardoe: I beg to move Amendment No. 285, in page 6., line 36, at the end to insert:
(2) No payment shall be made under this section to any educational establishment in which more than half of the students are fee-paying.

The Temporary Chairman: I think that it will be convenient for the Committee to consider with it Amendment No. 265, in page 7, line 11, at end insert:
(4) The Minister of Labour shall not make any payment under this section to any independent school which does not receive any grant from public funds For the purposes of this subsection a "grant from public funds" shall riot include the payment of the fees of any pupil by a local authority

Mr. Pardoe: It will be obvious to all hon. Members at the outset that this is really about the public schools. "Faith, hope and charity," said St. Paul, "and the greatest of these is charity." However, the only thing which the public schools have in common with charity is St. Paul. He was a splendid influence on the one and a total disaster on the other. I leave it to lion. Members to work out which applies to which.
The Government say that there are about 1,100 independent schools which they recognise as being efficient and which are likely to be registered as charities. There are a further 500 independent schools which are, again, recognised as being efficient, which will pay the tax but which will not get the refund. Then there are another 2,000-odd independent schools which are not recognised as being efficient and will not get anything, either. We have a situation in which about 1,100 independent schools will get the refund and about 2,500 will not.
Some independent schools are to get it and some are not. The ones which do get it will be called charities, and I believe that there is a basic injustice here. [HON. MEMBERS: "They are charities."] I am prepared to accept any terminology which hon. Members like to give. I am making the point that there is an injustice between one kind of independent school and another.
11.15 p.m. 
I believe that the Government have a straight choice. They should either refund the tax to all independent schools, or, much more importantly and as is suggested in the Amendment, ensure that none of them gets the refund at all. I am sorry that the Secretary of State for Education and Science was not here during the debate on the previous Amendment, because we heard a great deal from Scottish Members about the various definitions of the word "charity" in Scotland, and how it differed from the definition that we know in England. 
I think that I am right in saying—and I am sure that the right hon. Gentleman will correct me if I am wrong—that to qualify as a charity a school must show that it is not run at a profit, and it must give its purposes. In Scotland there is a rather narrower definition. It is the relief of poverty, and if one tried to define public schools as being for the relief of poverty, the whole thing would become as ludicrous as it almost is.

Mr. Robert Cooke: Can the hon. Gentleman give one example of a public school which makes a profit?

Mr. Pardoe: I am not aware that the House of Commons makes a profit, but



that does not make it a charity. The point about whether public schools make a profit is not relevant. Of course they do not normally make a profit, but what I am trying to show is that if we are to come to some definition of charity, we ought to be clear about whether the public schools come within this definition or not.
I think that I can illustrate the point best by quoting the purposes which some public schools state as being their charitable intent. Cheltenham Boys' College, which no doubt some hon. Members know, states that it is "providing education for the sons of gentlemen". That is not a charity. The purpose of that splendidly charitable institution at Stowe is "to educate boys of classes above those ordinarily attending public elementary schools". That is a splendidly charitable purpose! [HON. MEMBERS: "Hear, hear."] Then we have Cranleigh, the purpose of which is to provide a "middle class boys' school", and Bramley, the purpose of which is to provide "a middle class girls' school".

Sir John Eden: rose—

Mr. Pardoe: I have given way once. [HoN. MEMBERS: "Be charitable."] When the last Administration tried to define what ought to be covered by the Charities Act, 1960, it came up against certain difficulties, two to be precise, Eton and Winchester, and these two were excused from declaring either their aims or their incomes because of the extreme antiquity of their origins.
So much for the purposes for which these educational establishments were set up. I give way to the hon. Member for Bournemouth (Sir J. Eden) now.

Sir J. Eden: I wonder whether the hon. Gentleman has heard of the Charity Commissioners, and of the fact that the responsibility for determining what is or is not a charity rests with them? I wonder, too, whether, as a representative of the Liberal Party, which defines as one of its principles the right of freedom of choice, he is not slightly ashamed of hoping to get all his applause from the Socialist benches opposite?

Mr. Pardoe: I had rather hoped that I was carrying the leader of the Conserva-

tive Party with me at least in this matter. I do not intend at this stage to answer that point, because I have it listed in my notes to be dealt with in detail a little later on.
I now want to draw the attention of the Government Front Bench to the statement of the Secretary of State for the Department of Education and Science on 22nd December, 1965, when he was talking about setting up the Public Schools Commission. He said:
 The Government are determined that the public schools should make the maximum contribution to meeting the education needs of the country …This implies that the schools should, like other parts of the education system. become progressively open to boys and girls irrespective of the income of their parents."—[OFFICIAL REPORT, 22nd December, 1965; Vol. 722, cc. 2107–8]
That, presumably, is a brief statement of the Government's policy, and I would not in any sense dissociate myself from one word of its excellent sentiments. But the Government already give substantial tax advantages to those who educate their children at public schools. If one manages to find a fairy grandparent to educate one's children it becomes substantially better from a tax point of view. Again, if one sets up an endowment insurance policy one gets all the tax advantage for the premiums.
I want to take up the point that has been made about freedom of choice. This great red herring is always drawn across public schools debates, and it has been drawn across this one tonight—as it will be again and again and again in the course of this debate. I am not trying to circumscribe freedom of choice; freedom of choice is already circumscribed by the wealth of the parents. It is all very well for Conservative Members to talk about freedom of choice, because many people in this Committee, with the incomes hon. Members enjoy, have the benefit of this freedom. But many people outside never approach the point where they have this freedom for which hon. Members scream so loudly.
I hope that I shall get some support from both sides of the Committee on that point.

Sir Edward Boyle: I want to ask the hon. Member one question so that I can see who is to the left of who. Has the hon. Member come across the speech


made by the present Minister of Public Building and Works last year at the Headm asters' Conference, when he said:
 We do respect parents' freedom of choice and it is not our intention to damage the private sector of education.
I do not think that the hon. Member has come across that.

Mr. Pardoe: I am not speaking for the party opposite; I am speaking for myself. I regard part of my mission in this House as being to wave the flag of radicalism before the benches opposite.
This is a very moderate Amendment. I am merely talking in terms of schools where 50 per cent. of the pupils are fee-pay ing. The Secretary of State for Education and Science, in the days when he was a free-thinking author, actually advocated 75 per cent. as the basis on which this should be settled. I do not argue with that figure. I am prepared to go along with that recommendation if the Commission should make it, or even the figure of 100 per cent., if the Comm ssion can adduce a proper argument for it.
I never set out with the intention that this should be a debate on the value of the independent schools. This is an attempt to bring before the Government one more anomaly in the Bill. I sincerely wish to save the Government from the embarrassment of voting charity relief to the public schools.

Mr. R. H. Turton: The hon. Member for Cornwall, North (Mr. Pardoe) has levelled an attack not on the public schools but on the whole system of boarding education, of which there is a very great shortage. I cannot understand why the manufacturer of candyfloss should be given a bonus, while the manufacturer of character has to pay the tax. There are about 1,100 independent schools in this country, of which about 400 are members of the Headmasters' Conference. The rest are small schools, educating people of all classes and principally people who require a boarding education because their parent; are in the Services or serving overseas. [An Hoist. MEMBER: "Nonsense."] If the hon. Member thinks that it is nonsense, I can give him full details.
I am President of the Independent Schools Association, and only one of our 500 members is a public school. If the

Liberal Party and the Socialist Party are determined to penalise independent education, what will happen? Can the local education authorities supply the boarding education which is supplied by the 1,100 independent schools? That is the challenge. If they cannot, by taxation and the other Measures which are intended, the Government will dry up this source for building up the nation's character. This is a very good thing for the country to know.
Those of all classes and all levels of income, who sacrifice to send their children to these schools, sometimes paying as much, in the schools in my association, as £30, £40 or £50 a term, should know that the Socialist and Liberal Parties are determined to exterminate this from Britain. Of course a parent's freedom of choice is of value to the country. It is not only the rich who get that. In the schools in my association are the children of parents of very small means, who are making considerable sacrifices because they want their children to have a boarding education.
Let us now consider the case of tnc very small proportion of children in independent schools who are sent there by the local education authorities because they have difficult backgrounds and require the special treatment which they can get only at a small independent school. Is that practice to be crushed by this tax? Is that what the Liberal and Socialist Parties are attacking? We must be clear on this, because members of my association have not known hitherto what the attitude of the two parties is.
During the 1964 election we sent a questionnaire to every candidate asking what his attitude was to the independent schools. The Liberal Party candidates replied that they were in favour of independent education. We sent one to Transport House, and the Secretary of the Socialist Party replied that they were out to abolish the public schools but were not against independent education. If anyone challenges that, I can show him the letter.
I ask the Government to think again about the way this tax will fall. At present, I think that there are in this country, 328 direct grant establishments, of which 141 are to have their tax refunded, and 187 are to get no refund. Where I do agree with the argument of


the hon. Member for Cornwall, North is in his belief that there is no sense in this division. I might add that the figures I have just quoted were worked out from an Answer to a Question on 21st June to the Secretary of State for Education and Science. 
11.30 p.m. 
Why, of the direct grant schools, should 141 get the refund, and 187 not get it? Taking the independent schools recognised as efficient by the Department of Education, 758 will have a refund, and 787 will not. What is the criteria which the Government are using? In my view, education is not a matter which should be taxed under the Selective Employment Tax at all. To bring education in any form into this field is not only unfair; it is wrong. Of course, if one wants to exterminate the free choice of parents in the matter of their children's education, then the Government should do it in an above board manner and go ahead. What it should not do is to adopt this underhand way of achieving it. 
The schools are divided into different categories, and not only are the figures quoted by the hon. Member for Cornwall, North wrong, but his argument is wrong as well. His argument was certainly wrong when he said that none of the schools which are recognised as inefficient will get the refund. A number of those recognised as not being efficient are in that category simply because they have not the money for laboratories, assembly halls, and so on, will get a refund, while others will not. This matter requires a good deal of consideration.

Mr. Pardoe: I gave the figure of 2,000 schools and I should be happy if the right hon. Gentleman could refute that figure.

Mr. Turton: I have quoted figures which were given to me in an Answer by the Secretary of State for Education and Science on 21st June. I have also checked them with my Association, and if the Liberal Party has other figures, I hope that the hon. Gentleman will check them against mine.
Under the guillotine procedure we were prevented from discussing the important question of whether educational establishments should all get the refund. Per-

sonally, I believe that to be the right answer, but if one is to have this other way of dealing with them under Clause 4 —what we call the charities way—then we have to allow schools which are not profit-making under the charitable trusts regulations, time to get into charitable trusts. It is wrong to have this uneven distribution, where 43 per cent. get the refund, and 47 per cent. do not.

Mr. Robert Maxwell: The right hon. Gentleman's statement that the Labour Party is interested in exterminating the private schools is quite untrue. What we say is that we should replace the system whereby children who go to them go because their parents can send them with a system whereby the children who go should be those who ought to go to them.

Mr. Turton: I will send the hon. Gentleman a copy of the Labour Party letter from Transport House during the 1964 election period, in which it is clearly stated that the Labour Party is not against independent education, but is in favour of abolishing the public schools. The hon. Gentleman is putting in quite other terminology what his party is saying here.
I reject what the hon. Member for Cornwall, North says. We should make it clear that we say that education in this country should give parents freedom of choice.

Mr. Alexander W. Lyon: I am glad to join with the hon. Member for Cornwall, North (Mr. Pardoe)—I do not know whether I should call him my hon. Friend—in supporting this Amendment. As you have pointed out, Sir Eric, there is an Amendment down in the names of myself and some of my hon. Friends about this same problem, in rather different terms. We would go rather further than the hon. Member for Cornwall, North. The only matter that destroys the amity between the hon. Member and myself is that he has already made so many of the points which I had intended to make, but I think they are worth rehearsing because they obviously did not get through to the right hon. Member for Thirsk and Malton (Mr. Turton).
The reason we appeal to the Government to think again about this matter is that this is an act of social justice.
In an intervention during the course of Questions on 16th June, the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) said:
Is the hon. Gentleman aware that, whatever the intentions of the tax, the figures which he has disclosed this afternoon will strike people as representing a completely indefensible anomaly educationally, and that we shall certainly press this matter very hard? "—[0Fricim, REPORT, 16th June 1966; Vol. 729, c 1462.]
I agree that this is a completely indefensible anomaly, and I want to get rid of it. This is why I suggest that we should either treat all independent schools as worthy of repayment or we should say that none of them should be repaid. I for one would say that none of them should be repaid. I do so for several reasons—

Mr. Martin Maddan: Before the hon. Gentleman gives his reasons, may I point out that while it may be a good thing to impose justice upon everybody the fact is that the independent private schools which do not qualify under the Bill are not complaining?

Mr. Lyon: I speak on behalf of all those parents who send children to those schools. They may be complaining. May I set out my reasons for my attitude? During the course of the debates on the Finance Bill and on this Bill the Government have had to set their face against some very powerful arguments on behalf of the disabled, the blind, widows and some part-time workers. Here we are by this Measure giving £3½ million back to some of the biggest bastions of social privilege in this country.

Mr. Victor Goodhew: Has the hon. Gentleman calculated how much it would cost the taxpayer if he were to abolish these bastions of social privilege, as he calls them, and if all the pupils who attend them were to attend State schools?

Mr. Lyon: I have made this calculation. I have worked out from the figures which are given in the statistics of education that in this country 8 million school children receive, under the State system, £136, on average, towards their education. The private sector, by means of the fees which are charged, cost their parents £500 or £600.
If the policy of the Labour Party were implemented, and these schools were integrated into the public sector of education, they would find that these resources could be funnelled through the State system into these schools. They would also find the benefit of this in their own pockets. But the real case for integrating the public schools is that the amount of concern which those parents would show towards the conditions existing in State schools would be such that there would be a revolution in education. One reason why, under our present system, we cannot get the immense public impetus that is needed to increase the priority of education in our public spending is because so many of the more voluble and vociferous parents are sending their children to private paying schools.
The cost of accepting the Amendment to parents who send their children to public schools has been worked out by some newspapers. It is estimated that S.E.T.—this tax which the right hon. Member for Thirsk and Malton described as an attack on the public schools—would cost such parents between £6 and £16 a year. The Ministry has issued figures stating that the average cost would be £7 a year. Meanwhile. the average fees at these schools are between £300 and £550 a year. Can anybody really claim that £7 on £500 a year represents an attack on the public schools?

Mr. Goodhew: rose—

Mr. Lyon: No.

Mr. Goodhew: Give way.

Mr. Lyon: Not until I have completed this part of my argument.

Mr. Goodhew: rose—

The Chairman: Order. The hon. Member must resume his seat if the hon. Member who is speaking does not give way.

Mr. Lyon: I will give way shortly.
This so-called attack is, therefore, on parents who can afford to pay perhaps £500 to send their children to these schools—remembering that £500 is more than about 7 million of Britain's wage earners earn each year. I suggest that


if these parents can afford to pay £500 a year, they can afford another £7 a year.

Mr. Goodhew: The hon. Gentleman said that the additional cost to such parents of S.E.T. would be £7 a year. Presumably, that would be the cost to the Exchequer of giving relief, if the hon. Gentleman's figures are correct. He also said that the cost to the State of educating each child was £136 a year. Is he not, therefore, really saying that if all the pupils now at public schools went to State schools it would cost the Exchequer twenty times as much as giving this relief?

Mr. Lyon: The figure of £7 is the sum calculated to cost those parents in increased fees. The figures of £6 to £16 which I mentioned were given by the headmasters of some of the larger public schools when this controversy arose. As the hon. Member for Cornwall, North has said, these schools already get considerable help from the State in meeting their outgoings. Where they qualify as charities, they have a 50 per cent. reduction in their rates. Their endowments are not subject to taxation. Eton gets one-third of its income from endowments, and as a result of various kinds of manoeuvre, many of the fees that are paid qualify for tax concessions. It is estimated in a poll carried out by the Advisory Council for Education, published in February, 1964, that only 11 per cent. of the sample of parents paid the fees out of current income. In order to send their children to these schools most of them resorted to some kind of capital payment device which attracted tax allowance. 
11.45 p.m. 
I have to some extent already dealt with the injustice that would be caused it these proposals went through as stated in the Bill. The situation is even worse than suggested by the hon. Member for Cornwall, North. About 1,100 schools might qualify if they all registered—and some of them are capable of registering, although they have not yet done so—as charities, and there are 500 schools which could not so register as they are at present laid out. In addition, there are 2,205 schools which, curiously enough, attract 160,000 pupils whose parents want the privilege of sending their children to schools that are not efficient. This is the

element of choice which the hon. Members opposite are seeking—

Mr. Robert Cooke: I am sure that the Committee would be grateful to the hon. Member if he would tell us where these children would now go if he succeeded in abolishing the schools to which they go at present.

Mr. Lyon: They would go to the same schools, but the schools would be integrated into the State system, and the payments would be made out of the funds that would be so readily available when all these poor parents, for whom the right hon. Member for Thirsk and Malton expressed such grief, all increase their tax to pay for this. Indeed, they would be only too willing to do so, if their children were going to a State school.

Mr. R. Gresham Cooke: I have been listening to the hon. Member very carefully, and have noted his calculations of what it would cost if all children in independent schools were taken over by the State. The hon. Member gave a figure of 500,000 or so. I have been making a calculation. If there are 500,000 children in independent schools, at £136 a head it would cost the State an extra £68 million, which is now being paid for them.

Mr. Lyon: I do not accept the hon. Member's figure of 500,000, but if there are 500,000 children for whom there is being paid an average of £400 a year, what is left for the outgoings, remembering those parents who would be only too willing to contribute more in taxation to improve the State schools if their children were sent there?
What is a more serious matter is that when this Measure was first proposed in the Budget I was very concerned about the effect on charities. I have considerable experience of charitable institutions. I know a great deal about the work being done by the Churches, and I was greatly concerned lest this tax might fall on their work. I made representations to the Chancellor of the Exchequer about these effects, and I consulted public opinion in my constituency and in my own area about them.
What astonished me was to find that there is increasingly a body of public opinion which is rejecting the whole concept of charity simply because these


bogus charities are getting the same kind of allowances from the State as are the genuine charities. On this, I feel very deeply indeed. That is why I have put down this Amendment. Eton was founded for 12 children of the poor and now children of the poor cannot get through its doors. It may have been a charity when it was founded, but no one can say that these institutions are charities today. Some of them have colossal incomes—Marlborough has £350,000 a year, Charterhouse has £340,000 a year, Arundel £320,000 a year, and Wellington £312,000 a year. These are not charitable in any sense of the word, not even in the sense of the word used by the Scottish hon. Member who spoke the debate. Underlying the concept of charity there is—

Mr. Frank Judd: Does my hon. Friend agree with the headmaster of Marlborough who recently wrote in his book, "The Public School of the Future":
 The public schools can justly be called a divisive factor in society. This is, in my opinion, not merely regrettable, but morally wrong."?
The Conservative Minister of Education, speaking in this House in 1961, said:
 A small minority of children coming from more or less the same kind of homes "—

The Chairman: Order. An interruption must not run to the length of a speech.

Mr. Lyon: I find it very helpful. I thank my hon. Friend.
If we go on with this blurred conception of what is a charity we shall debase the whole conception of charities and public support, which is vital to deserving organisations, will be alienated. The whole trouble stems from the fact that there is no clear definition in English law of what a charity is; there are only general classifications. The Nathan Committee on Charities suggested that there should be a much tighter definition. I regret that the House, when it was passing the 1960 legislation, failed to insert any definition in that Act. If it had done so there would have been an opportunity to separate the good from the bad.
I have no doubt that the Government will say tonight that it is difficult to draw

a clear line between the good and the bad charity and this is why we have to accept public schools. It was difficult enough for me to phrase this Amendment and I am sure that the same difficulty confronted the hon. Member for Cornwall, North, but if we are to preserve the concept of charity in the public mind we must restate the definition as a definition which has underlying it the notion of giving benefit to a wide measure of the public and that is not what the public schools do.
I have not attacked, I hope, public schools—

Mr. Armstrong: Why not? It is time that my hon. Friend did so.

Mr. Lyon: — because I am content to await the report of the Newsom Committee and to make up my mind when I have seen it, but if this tax helps the independent schools to reconsider their objection to integration with the public system, it may have been a very valuable exercise. These schools, which have only 5 per cent. of our children, have 10 per cent., of our teachers. Teachers are one of the scarcest commodities in the country today. One of the difficulties about giving decent standards in the State schools is that we cannot get the number of teachers we want to bring down the staffing ratio. No wonder that the staffing ratio in State schools is 24 and in the public schools 12. Even allowing for the so-called bigger sixth forms—and increasingly the State schools have bigger sixth forms—the ratio in public schools is still only 1 to 16.

Mr. Gerry Fowler: Would my hon. Friend accept that much of his argument also applies to many of the Oxford and Cambridge colleges, which are also charities in a very peculiar sense, which also receive large endowment incomes and which, according to the Franks Report, pay their staff at a rate much higher than the norm in English universities?

Mr. Lyon: I accept the point. If it is right—and I have not argued the case —that there should be the privilege of choice in education so that one can choose between the private sector and the public sector, it must be right that those who choose the private sector should pay for it. That is all I ask.

Sir E. Boyle: We are obviously operating under severe difficulties because of the Guillotine and I want to leave a few minutes to the Minister to reply. I will, therefore, make my remarks a good deal briefer than I would have wished after listening to the hon. Member for Cornwall, North (Mr. Pardoe) and the hon. Member for York (Mr. Alexander W. Lyon). I hope that the hon. Member for York will forgive me when I say that, although I have no children either at independent schools or at maintained schools, I do not think that it can be said against me that I have not tried to obtain a rising share of the national wealth for the maintained system.
Seeing the Chamber so full for this debate on public schools, I hope that we can get something like equal support from hon. Members opposite when we raise the particular case of direct grant schools, which include many children, particularly in the North of England, who would be at public schools if they lived in the South and which also contain able children for whom fees are not paid because they come from poorer families.

Mr. Alexander W. Lyon: My Amendment would exclude the direct grant schools.

Sir E. Boyle: I am aware of that. I say that I hope we shall in future get support from the hon. Gentleman for what we have to say about them.
I am completely in agreement with my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) in objecting to a tax on any form of education. We take the view, as did a former Labour Minister of State, that the nation cannot afford to lose the services of any good school and I was glad that my right hon. Friend pointed out the especially severe effect of the tax on the boarding schools.
With respect to the hon. Member for York, I tell him that the figure of £7 is completely bogus. It will be a great deal higher for boarding schools. Many examples could be quoted of schools which have pointed out that it will cost them £17 or £18 a head. I cannot see the sense of a measure which discriminates against boarding education at a time when it has been made plain through

detailed research that there is a national need, and demand, for more of it.
We very much hope that the Government will stand by the clear statement of the Chancellor of the Exchequer during the Second Reading of this Bill. Since I have been a Member of the House of Commons, we have never had a taxation proposal benefiting charities which all charities were not allowed to enjoy. To discriminate among charities would be something completely new, and something thoroughly wrong and unwelcome, within our tax system.
12 p.m.
There is, moreover, a further point. The Public Schools Commission has been quoted. Having appointed the Public Schools Commission under Sir John Newsom—and I shall have something to say about that later—it must be wrong to suggest discriminating against certain charities which provide education. Having set up the Commission let us not prejudge its results by taking a side-swipe, through the tax system, at the public schools.
The Labour Amendment is open, apart from anything else, to one very obvious objection. As I read it, it refers to
 the payment of the fees of any pupil by a local authority.Whatever view we take on the public schools, if we wish to see a wider entry into them it is no good just going back to Fleming, which is what this Amendment seems to do. It seems very curious, having set up the Newsom Commission, for the party opposite to move an Amendment taking us back to the Fleming Report.
Now I turn to the Liberal Amendment. As I listened to the hon. Member for Cornwall, North who, with his colleagues on the Liberal Bench, were all educated at public schools, I was reminded of Sir Winston Churchill's first speech in this House, in which he remarked that the Member who had preceded him would have done better, instead of making his violent speech without moving his moderate Amendment, to have moved his Amendment without making his violent speech.
There are many hon. Members who wish to see a widening of entry into the public schools, but I am quite sure that


it would be madness, in advance of the report of Newsom Committee, for us to accept any Amendment with a precise figure of the kind contained in the Amendment we are now discussing. That leads me to say a word about the attitude of my hon. Friends and myself on this question of the future of the public schools. I put what I believe is the right point of view when I questioned the Secretary of State on 22nd December last. I asked what was his real objective in setting up the Public Schools Commission:
 Is it to give a wider range of children the opportunity to benefit from the admittedly good education provided by many of these schools—many people would support that objective—or is it to bring about fundamental changes in their independent status and character ….?"—[OFFICIAL REPORT, 22nd December, 1965; Vol. 722, c. 2108.]
That is the question which we continue to ask on this side of the Committee. We recognise that there are many children, who, on an objective test, ought to be getting a boarding education. We shall study with great interest what the Newsom Committee has to say about this when the time comes. Equally, we on this side said in our election manifesto that we believe that independent schools of good standing ought to have the opportunity of applying to be put on the direct grant list. We would far rather see a good independent school applying for inclusion on this list than see a direct grant school compelled by the educational policy of the party opposite to go totally independent.
Nonetheless, we believe that it is highly important that there should continue to be an independent sector in education. And if the public schools are to be "integrated", whatever the word may mean, in any form, they are surely worthy of integration only if they are allowed to pursue their present form of excellence under new and perhaps wider forms of recruitment. That is to say, it is vital in our view that the independent status and functions of those schools should be preserved. On that point, I agree heartily with what my right hon. Friend the Member for Thirsk and Malton said this evening. I apologise for having left the Financial Secretary so litte time, but we hope that the Government will stick to the pledge given so clearly on the Second Reading of the Bill.

Mr. MacDermot: I am grateful to the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) for allowing me a few minutes to reply to the debate. I speak for all my hon. Friends when I say that we are very grateful to the hon. Member for Cornwall, North (Mr. Pardoe) and my hon. Friend the Member for York (Mr. Alexander W. Lyon) for what has been, for some of us at least, a very enjoyable debate.
Having sat here for many hours and days on this Bill and on the Finance Bill, and having had to endure a great deal of what I regarded as synthetic indignation from the other side of the Committee, I found it a great relief for once to see the real thing. The right hon. Gentleman asked if it would be useful to establish here exactly who was to the left of whom, but he does not need to do any struggling to establish his position within his party.
The question that my hon. Friends will want me to answer is why the Government cannot advise the Committee to accept the Amendments. I shall not deal with the drafting defects, but come at once to the substance of the debate which, as the hon. Member for Cornwall, North made clear from the outset, was aimed at the fee-paying schools, as was Amendment No. 265, spoken to by my hon. Friend.
The simple point is that when my right hon. Friend the Chancellor of the Exchequer told the House, during the Second Reading debate on the Finance Bill, that he was seeking a way to deal with charities, the question whether any concession should be extended to all charities had already been raised. Some of my hon. Friends questioned whether all charities should necessarily benefit from the refund.
That conception was strongly attacked by the right hon. Member for Enfield, West (Mr. lain Macleod), and, therefore, the Chancellor made it perfectly clear in his speech that he could not regard it as his responsibility, and said:
 …nor do I want to undertake the task, to judge between the relative social merits of any of these charities. Therefore, it is a case of all in or all out, as far as I can see, with all the implications that flow from that." —[OFFICIAL REPORT, 25th May, 1966; Vol. 729. c. 655.]


I and many of my hon. Friends are aware that there are very strong arguments for saying that the time has come when the law of charities and the definition of charities should be reconsidered, but if that is to be done it cannot be done by a side-wind in dealing with a particular relief in one narrow field of the tax law. There is an established field of exemption for charities in our tax law which has wide repercussions, and we are here extending it a little further in respect of this tax.
If any exceptions are to be made, it would be wrong and invidious to try to make them in relation to this tax alone, and it would impose a wholly unwelcome and impossible task upon my right hon. Friend in drawing the division. Indeed, that difficulty is exemplified by the drafting of the Amendments.
Amendment No. 265, which did not have the difficulty that it would cover direct grant schools, would also exclude from the refund independent schools for handicapped children, a number of charitable nursery schools, some of the private experimental progressive schools, and a number of other independent schools upon which local authorities rely heavily where they are not able themselves to offer grammar or boarding school places. These are real difficulties that would confront my right hon. Friend or anybody else trying to draw this distinction.
Finally, a word about the question of direct grant schools which was raised in the debate. There are 179 of these schools, and it is expected that all will qualify as charities. There are 320—

It being ten minutes past Twelve o'clock (the House having resolved itself into the Committee at ten minutes past Four o'clock) The CHAIRMAN proceeded, pursuant to Order [18th July], to put forthwith the Question already proposed from the Chair.

Question, That the proposed words be there inserted, put and negatived.

The CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at ten minutes past Twelve o'clock, including the Questions on Amendments,

moved by a member of the Government, of which notice had been given, to Clauses 5 and 6.

Amendments made: In page 6, line 39, leave out "during any period" and insert: "for any contribution week".
In page 7, line 11, at end insert: "and includes Greenwich Hospital ".
In page 7, line 16, leave out "has certified" and insert "certifies".
In page 7, line 17. leave out "has found" and insert "finds".
In page 7, line 18, at end add:
, and in any such appeal the Secretary of State shall be entitled to appear and be heard MacDermot.]
Clause, as amended, ordered to stand part of the Bill.

Clause 6.—(SPECIAL REFUNDS FOR CERTAIN HOUSEHOLDS.)

Amendments made: In page 7, line 41, leave out from "person" to end of line 46.

In page 8, line 16, leave out subsection (5) and insert:

(5) No payment shall be made by virtue of subsection (2)(c) of this section in respect of any household by reason of its including a child unless either—

(a) that household includes one, but not more than one, member who is either a parent or the spouse of a parent of that child; or
(b) that household includes no such parent or spouse but—

(i) includes a member who appears to the Supplementary Benefits Commission or, as the case may be, to the Appeal Tribunal to be discharging the functions of a parent with respect to that child; and
(ii) does not include a spouse of that member of the household,

and in either case that member of the household is normally engaged for more than eight hours weekly in work other than the domestic work of the household.—[Mr. MacDermot.]

Clause, as amended, ordered to stand part of the Bill.

Then The CHAIRMAN left the Chair report Progress and ask leave to sit again.

Committee report Progress; to sit again this day.

WAYS AND MEANS

Considered in Committee.

[Sir ERIC FLETCHER in the Chair]

TEES AND HARTLEPOOLS PORT AUTHORITY

Resolved,

That it is expedient to authorise the payment into the Exchequer and the reissue out of the Consolidated Fund of any sums required to be so paid or reissued by virtue of such of the provisions of any Act of the present Session to transfer to the Tees and Hartlepools Port Authority the harbour and dock works of the British Transport Docks Board at the Hartlepools and Middlesbrough as relate to the transfer of debts of the said Board to the said Authority.—[Mr. MaeDermot.]

Resolution to be reported.

Report to be received this day; Committee to sit again this day.

CENSORSHIP OF THE THEATRE

So much of the Lords Message [19th July] as relates to the appointment of a Committee to review the law and practice relating to the censorship of stage plays to be considered forthwith.—[Mr. Lawson.]

So much of the Lords Message considered accordingly.

Select Committee of Eight Members appointed to join with the Committee appointed by the Lords to review the law and practice relating to the censorship of stage plays:

Mr. Andrew Faulds, Mr. Michael Foot, Mr. Emlyn Hooson, Mr. Hugh Jenkins, Sir David Renton, Mr. St. John-Stevas, Mr. G. R. Strauss and Mr. William Wilson:

Leave to hear parties interested by themselves, their counsel, or agents, so far as the Committee think fit:

Power to send for persons, papers and records; to sit notwithstanding any adjournment of the House; and to report from time to time:

Three to be the Quorum. —[Mr. Lawson.]

Message to the Lords to acquaint them with such of the said Orders as are necessary to be communicated to their Lordships.

GIBRALTAR

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Whitlock.]

12.45 a.m.

Mr. Patrick Wall: In the last speech which I made to the House on the subject of Gibraltar on 3rd August last year, I stressed that I was a friend of Spain and had no wish to quarrel with Spain, with her people or with their Government. Since that time, the Spanish Government have flooded British Members of Parliament with a lot of expensive propaganda which distorts completely the real situation affecting Gibraltar. Spain cannot, therefore, object if British Members of Parliament now hit back on behalf of their countrymen in Gibraltar.
The House will know that Spain has imposed what amounts virtually to a blockade on Gibraltar since October, 1964. At about the same time, the United Nations Committee of Twenty-four called for Anglo-Spanish talks on Gibraltar in order to find a negotiated solution
 bearing in mind the interests of the people of the territory.
The Spanish Government interpret that request as a rejection of the principle of self-determination for the people of Gibraltar and maintain that the only answer now is to annul Article 10 of the Treaty of Utrecht and give Gibraltar to Spain. I maintain that no impartial person could possibly read that meaning into the statement of the Committee of Twenty-four.
If anyone takes the trouble to study the records of the Committee's discussions in 1963 and 1964, he will see that all the representatives, with the exception of those of Venezuela, Uruguay, Tunisia and Syria, supported the principle of self-determination, and all those four countries, with the sole exception of Venezuela, accepted the view put forward in 1963 by the United Kingdom that the interests of the inhabitants were paramount, which is, of course, Article 73 of the United Nations Charter.
The House will recall that the British Government refused to negotiate under duress and, quite rightly, demanded the lifting of the frontier restrictions as a


precondition of negotiation. Rightly or wrongly, in February, 1966, they reversed that decision and announced that talks with Spain would start in May.
As I understand it, at these talks the Spanish proposals were as follows: first, that sovereignty over Gibraltar should be transferred to Spain; secondly, that the British should be allowed to retain a military base in Gibraltar which would be co-ordinated with Spanish defence requirements; thirdly, that a personal statute giving certain guarantees to the present inhabitants of Gibraltar should be offered by the Spanish Government; and, fourthly, that a degree of regional co-operation was envisaged for the whole of the territory surrounding the Bay of Algeciras.
The House will see immediately that those proposals paid no regard whatever to the wishes of the people of Gibraltar, and it is interesting to note that they were made at exactly the same time as the Spanish Government were themselves defending the retention of their own African colonial possessions, including two towns, Ceuta and Melilla, captured, respectively, from the Portuguese in 1415 and from the Berbers in 1470, and both, like Gibraltar, defended in a series of sieges. Also like Gibraltar, they both have a 90 per cent. European population and contain a military garrison.
It was only last month, when speaking of another Spanish colony in Africa, that Admiral Carrero Blanco, a Minister of the Spanish Government, is reported in the Spanish Press to have said:
 No nation has the right to endeavour to revindicate the sovereignty over your territory, and no one has the right to exert pressure over your self-determination!
The Admiral went on:
 If your will is to remain indissolubly tied to the country which has for so many years protected you, as one of her provinces, then that country will never abandon you.
What I hope is that a Minister of the British Government will give an equally categorical declaration of faith to the people of Gibraltar. I know that a request for a categorical rejection of the claim of Spanish sovereignty over Gibraltar has been made quite a number of times in this House in recent months. Only about a week ago, my right hon. Friend the Member for Barnet (Mr. Maudling) sought an assurance that there

was no question of conceding sovereignty in any way to Spain over Gibraltar, unfortunately in his reply the right hon. Gentleman the Foreign Secretary trotted out that rather hackneyed formula that
 … we have no doubt as to our sovereignty."—[OFFICIAL REPORT, Vol. 731, c. 1015, 11 th July, 1966.]
Of course we have not, but do we intend to fight for our rights and for the rights of the people of Gibraltar?
It is a somewhat interesting reflection that when in opposition, the party now on the other side of the House concentrated on abusing Spain. Now they are in favour, apparently, of appeasing Spain.
I would like to ask these questions. If the talks were to start with the frontier restrictions still in force, why did they not start in 1964? Why have we to wait until Gibraltar has had to endure these restrictions for eighteen months? Secondly, why, since the talks in May, have two Under-Secretaries from the Foreign Office and the Colonial Office, respectively, been sent to Gibraltar to ask if the people wanted regional co-operation and continuation of the talks with Spain? I understand that they received pretty salutary replies to both of these questions. Thirdly, why has the Prime Minister refused to put Gibraltar under the Home Office when the Colonial Office ceases to exist at the end of this month? Is there any truth in the story that in the July talks last week Her Majesty's Government offered to remove all gates and obstacles on the British side of the frontier in return for the lifting of Spanish frontier restrictions?
All of these events lead Gibraltarians to wonder whether the British Government are preparing to do a deal at their expense. I do not suggest that this is so, but I do suggest that if the Government are not prepared to retaliate against Spain, then the Spanish blockade will continue and will intensify. Gibraltar believes that she is getting the kicks in a dispute that is really between London and Madrid. She faces an intensification of the blockade and wants to know what Britain is going to do to help.
I would like to make two suggestions. The first is about the constitution and the second about finance. Under the 1964 constitution, Gibraltar moved a step forward in the process of decolonisation. It


is, however, a temporary and intermediate step, but the people of Gibraltar want a secure future for their children, and this in accordance with a decision of the United Nations, can only be achieved in three ways.
First, independence, which is ruled out as incompatible with Article 10 of the Treaty of Utrecht and which is not desired in Gibraltar. Secondly, integration with the United Kingdom, which would give Gibraltar the status corresponding to an English county, probably with representation at Westminster, and certainly with British taxes and welfare services.
The third possibility in accordance with the views of the United Nations is what is termed free association with the United Kingdom. This is something on the lines of, say, the Channel Islands' association with this country, or perhaps a more up-to-date and more apt example is the association devised between New Zealand and the Cook Islands, which I suggest might be a very good example for Gibraltar. This free association would preserve a much higher degree of local autonomy, whilst leaving Her Majesty's Government in charge of international affairs and defence.
Though a new constitution for Gibraltar is the responsibility of this House and of Parliament as a whole, if the right of self-determination is to be maintained, surely only the people of Gibraltar are capable of deciding which of these possibilities they really desire? The Secretary of State pointed out in a recent Answer to a Question by me that the Legislative Council of Gibraltar had expressed satisfaction with the present constitution. I wonder whether this is still the case. Is it not a fact that there is a constitutional committee in Gibraltar at the moment looking into this matter?
It seems clear that it is only under free association, or under integration, that Gibraltarians can have the guarantee of remaining British for as long as they desire. Surely the first step towards this freely e.,s pressed wish of the people of Gibraltar, and, indeed, a testimony of the British Government's good faith, should bt., the transfer of Gibraltar to the Home Office, by which it was administered prior to 1801?
My second suggestion concerns finance. Her Majesty's Government have on a number of occasions recently made play of the fact that during the three years 1965 to 1968 Gibraltar has been allocated grants of £1 million plus a loan of £200,000. Is it not a fact that out of this sum £325,000 was unexpended from previous grants, and that the normal amount of financial aid to Gibraltar over three years would be about £400,000? Is not the additional grant therefore less than £500,000, which is not a very generous amount considering the circumstances in which Gibraltar has found herself during the past two years?
We know that there is a development plan for Gibraltar, and a report on development from the Federation of Commonwealth Chambers of Commerce. Can the Minister assure the House that adequate funds will be made available as they are required to finance this development plan? Would not the Minister agree that even with these development plans every effort must be made to attract both shipping and tourists, and what efforts are the Government making in this direction on Gibraltar's behalf?
I understand for example that United States warships now seldom call at Gibraltar, and that the fact that Gibraltar is one of the only Western Mediterranean ports of call for Soviet merchant ships and trawlers is doing much to assist the commercial life of the city.
I think it is clear that on both sides of the House we wish to see the end of the present quarrel with Spain, which is having an adverse effect on AngloSpanish relations. A number of my colleagues have resigned from the AngloSpanish Group in this House in order to express their solidarity with the people of Gibraltar. My hon. Friend the Member for Torquay (Sir F. Bennett), and my hon. Friend the Member for Essex, South-East (Mr. Braine), particularly asked me to mention them in this respect.
I am convinced that neither side of the House would permit sovereignty to be handed over against the wishes of the people of Gibraltar. Indeed, the Minister knows that there would be a hell of a row if any Government ever tried it on. We must, however, realise that the present situation cannot continue. I


think that this is the nub of the problem. If the Spanish Government continue to be unreasonable, and if these talks break down, then I believe that in all honour Britain is bound to retaliate, and we have plenty of means of so doing.
I believe that the people of Gibraltar have expressed their loyalty to this country by enduring nearly two years of frontier restrictions and other Spanish pin pricks. They now demand our help, openly expressed, and freely afforded, and I would like to know what the Government propose to do about it?

12.30 a.m.

The Under-Secretary of State for the Colonies (Mr. John Stonehouse): The House and the country will be grateful to the hon. Member for Haltemprice (Mr. Wall) for initiating this Adjournment debate, because it gives us an opportunity of sending good cheer and a message of good will to all Gibraltarians at this time of stress and strain. I have not had the good fortune to go to Gibraltar myself, but I have had the opportunity of discussing the problem of Gibraltar with the Chief Minister, Sir Joshua Hassan, and his deputy, Mr. Isola, and I appreciate, as does my right hon. Friend, the great concern felt in Gibraltar about the state of relations with Spain and the Spanish demand to Gibraltar.
I am glad to have the opportunity afforded by the debate of confirming the attitude of the Government towards the present negotiations with the Spanish authorities. Throughout these negotiations we are considering the real interests of the people of Gibraltar. That is our essential concern, and we are in no way departing from it. I am glad to have this opportunity of sending such a message to Gibraltar tonight. It also gives me an opportunity of sending a message to Madrid to say that although the frontier restrictions are being continued this will in no way deter us in our resolve to continue to regard our negotiations in respect of the future of Gibraltar by that criterion, namely, the real interests of the Gibraltarians themselves. I am glad to give that assurance tonight. I recognise the interest and the background of experience of the hon. Member, and I am grateful to him for initiating the debate.
Talks have been going on for some time—now being conducted by officials. They commenced on 18th May, when my right hon. Friend the Foreign Secretary met the Spanish Foreign Minister, Senor Castiella. I was present on that occasion and heard the very long statement, since released, made by Senor Castiella. I have it here, as I think the hon. Member has. I agree with him that Members of the House and the Press have been bombarded with this document. We have no doubt about the case which the Spanish authorities have put forward, but there is no doubt in our minds about our reply to this case. We are absolutely firm in our declaration that we have sovereign rights to Gibraltar. We are firm also in our declaration that we are in no way breaking the Treaty of Utrecht, which begins,
 The Catholic King does hereby, for Himself, his heirs and successors, yield to the Crown of Great Britain the full and intire propriety of the Town and Castle of Gibraltar, together with the port fortifications, and forts thereunto belonging; and He gives up the said propriety, to be held and enjoyed absolutely with all manner of right for ever, without any exception or impediment whatsoever.
This is our right to Gibraltar, and we are conscious of the fact that over 250 years that right has been more than confirmed time and time again.
In the discussions with the Spanish Foreign Minister, my right hon. Friend made it crystal clear that we held firmly to that position.
The hon. Member raised a number of questions. He asked why negotiations had been started this year and why they had not been commenced two years ago. It is our wish to try to bring the relations between Gibraltar and Spain to a sensible solution, and we felt that by agreeing to negotiations at this time we would help to reach a sensible and civilised solution.
He asked why two Under-Secretaries had been sent to Gibraltar. We are in constant contact with Gibraltar. We are anxious that the people in Gibraltar should have the fullest opportunity of expressing their point of view about the negotiations as they are conducted. I make no apology for the fact that not only have officials gone to Gibraltar but that we have also from time to time invited the Governor and the Chief


Minister to come to Britain to consult us.
We have refused to put Gibraltar under the Home Office because we believe that this would be no real solution to the problem. It is unlikely to satisfy the Spanish. We have to negotiate with them and this device would be no contribution.
We had hoped that the Spanish Foreign Minister's suggestion that the frontier restrictions would be removed during the negotiations would be an opportunity for improving relations between us. I regret that the restrictions are continuing in the way they are. We are giving a great deal of aid to Gibraltar, but, fortunately its economy is not too adversely affected by the restrictions. Although tourism has been affected somewhat, the health of the economy is not absolutely dependent on the restrictions being removed.
I am glad to be able to tell the House that we have given assistance to the Gibraltar authorities in the preparation of a development plan which we hope will help to strengthen the Gibraltarian economy in years to come. Two members of my staff are in Gibraltar at the moment, assisting in the development of the plan. I confirm what the hon. Gentleman said about economic assistance. We are making a million pounds available under the Commonwealth Development and Welfare Acts up to March, 1968, plus loans of £200,000, if required. We have also provided the major part of the cost of the Study Group's report on the development plan.
We gave a special grant of £100,000 in the last financial year for the budget of Gibraltar and further financial help for the period after March, 1968, will be considered in consultation with my right hon. Friend the Minister for Overseas Development nearer that time—

Mr. Arthur Palmer: Is it the Government's intention to continue these discussions with the Spanish indefinitely, even if the frontier restrictions are not lifted?

Mr. Stonehouse: We hope that we will be able to make some real progress during these talks and we do not want to do anything which will exacerbate the posi-

tion. We are bearing in mind the real interests of the Gibraltarians, and if there is any chance at all of reaching a sensible agreement with the Spanish, we believe that we should take that chance. It would certainly not be in the interests of the Gibraltarians if the talks were to break down.
As I said, we stick to certain principles during these discussions with the Spanish and I am glad to have this opportunity of confirming this. We hope that the Spanish will be under no misapprehension in this respect. We do not believe that consideration of any other action we should take is wise at this stage. I know that the hon. Gentleman would like me to announce all sorts of tough action which we should take in order to bring Spain to heel. I think that, on reflection, he would agree that this would not assist the talks which are still in progress. In fact, it would probably mean ensuring that the talks failed. We certainly have to keep the position constantly under review, and I think the hon. Gentleman will realise what that will mean. But I do not wish at this time to say anything —and I am sure the House will agree that it would be unwise to do so—which would embarrass the progress of the talks which are now being conducted by officials.
In conclusion, I should like to say that all of us in the House who have met and discussed this problem with Gibraltarians of all political groups are fully conscious of their anxieties about the future of Gibraltar. We have a great deal of respect for their point of view and a great deal of admiration for the way in which they have matched up to the stress under which they now live. But I think we should advise them that in these circumstances it may not be very wise to look for solutions that are not within the realms of real possibility in the near future. We must ask them to be realistic and sensible. Although this may be difficult for them to do, I am quite satisfied that most Gibraltarians will have the good sense, following the example of Sir Joshua Hassan and Mr. Isola, to adopt that attitude to the problem.
This is not the time to try to find extravagant solutions that cannot actually work out in practice. This is the time for statesmanship and for patience, and we


hope that as a result, a real and lasting solution can be found to the problem of Gibraltar's relations with Spain.

Question put and agreed to.

Adjourned accordingly at eighteen minutes to One o'clock.